How does Inflation Affect Our Life?
If a country invests too much note issue to the circulation, and when three are much more currencies than the amount needed , inflation is produced.
Inflation affects our life seriously. In the future as money may become more invaluable. There is a classical story:
A financial planer takes out one hundred RMB and asks his students: who can tell me the price of the money five years later? Some students eagerly answered: 80! 70!. One hundred RMB will not worth one hundred RMB in five years. It reflects that the money will become more invaluable. The nominal value of one hundred RMB is one hundred RMB. But inflation has made its real purchasing power for eighty RMB or lower.
As the price of inflation rising, the purchasing power of the money falls too much. Thus, workers’ real wages are declining; therefore, their life has become increasingly poor.
For farmers, the price of commodities rises. They have to buy means of livelihood and means of production at higher price. They have to sell their agricultural and manual products at sale prices. They can only pay fewer things and live a poor life.
Inflation also seriously affects general officers and intellectual life, because their salary can not increase according to the extent of the rising prices.
But, inflation would bring huge benefits to monopoly ruling class. They will not only get the most of the plunder from working people income into their own pocket through the government order and price subsidies, but also use the invaluable money to pay their debts.
So inflation does have a serious effect on our life. It makes money depreciated. Our life would become poorer.
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