During inflation, who suffers the most?

Question

Wage and salary earners
Creditors
Debtors
Businessman

Answer 1

During inflation, wage and salary earners typically suffer the most. This is because their purchasing power decreases as prices rise, meaning their wages do not go as far in terms of buying goods and services. Creditors may also suffer if they have fixed interest rate loans as the real value of their repayments decreases. Debtors, on the other hand, may benefit as they are able to repay their debts with money that is worth less in real terms. Businessmen may be impacted depending on their specific circumstances, but in general, inflation can lead to increased costs and decreased profits for businesses.