Write two demerits associated with money ?
Answers
Answer:
1. Instability.
A great disadvantage of money is that its value does not remain constant which creates instability in the economy. Too much of money reduces its value and causes inflation (i.e., rise in price level) and too little of money raises its value and results in deflation (i.e., fall in price level). Inflation distorts the pattern of distribution in favour of the rich ; thus, it makes the rich richer and the poor poorer. Deflation, on the other hand, results in unemployment and hardships to the working class.
2. Inequality of Income:
Money, through its excessive use and inflationary effect, creates and widens the inequalities in the distribution of income and wealth. This had divided the society into ‘haves’ and ‘have-nots’ and has led to a class conflict between them.
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