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Effects of inflation (Government (Increase in tax revenue which will lead…
Effects of inflation
Government
Increase in tax revenue which will lead to more spending on economy
Change in interest rates due to deficit in spending
Lower GDP due to depreciation
More money spent on benefits due to high unemployment
Less money will be spent to bring levels down
Producers
Costs exceed revenue
Increase in revenue
Higher exports
Prices are high
Higher costs for the producer
Firms
Increase in unemployment (cost push)
Reduction in unemployment
High minimum wage
Consumers
Decrease in disposable income
Decrease in HDI
Higher prices