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Households, Firms - Coggle Diagram
Households
Savers
Savings are eroded –> less purchasing power
Interest rates could increase
Less incentive to save
Fixed Income
Less chasing power
Usually buying more 'need' goods so standard of living decreases
Asset Owners
Assets increase in value eg. houses increase "wealth"
Borrowers
Real "value" of repayments decreases
Lender
Real value of repayments decreases so you receive less in 'real' terms
Changing incomes
Eg. a real estate agent will receive more comission
Firms
Costs
increase during inflation which could decrease profits
Exporters
If inflation is lower overseas they will be less competitive on the international market.
Borrowers
Real value of repayments decreases
Uncertainity
Firms don't lie, uncertainty when price increases so they put things off. eg. buying capital goods
Prices + profits
Prices will inflate which depends on costs