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The debtors are gainers during inflation, while the creditors are losers. The reason this happens is because, during inflation, the value of money reduces greatly. The implications of which are that a rupee in the month of August is worth much less than what it was worth back in March.
This means that a person can buy fewer goods per rupee in the month of august, than what he could in the month of March. In terms of the debtor, he is essentially paying back a smaller amount (in real terms) even though the amount he owed to the creditor remained the same.
As far as the creditor is concerned, the value of the money that he receives from his debtors is worth much less than what it was when he lent it to them. (Implying that his purchasing power will be reduced when they repay him)
What else can I help you with?
Debtors or creditors would be more likely to favor inflation?
Debtors.
Who would be more likely to favor inflation debtors or creditors?
A debtor would favour inflation; the debt would be repaid with money which is worth less than when it was borrowed.
Do creditors favor inflation?
no
Inflation hurts all creditors but it helps who?
Inflation typically benefits debtors, as it reduces the real value of their outstanding debts. When prices rise, the money they repay is worth less than when they borrowed it, effectively lowering their repayment burden. Additionally, businesses that can pass on increased costs to consumers may also benefit from inflation, as they can maintain or even enhance their profit margins. Overall, while inflation is challenging for creditors, it can provide relief to borrowers and certain sectors of the economy.
How does inflation affect investment?
The inflation affects the investment indirectly when read with the return. Example if an investment provides a return of 6%, and the inflation during the same period is 5%, the investment in real terms increases only by 1% and not by 6%, as inflation eats away returns to the tune of 5%.
Debtors or creditors would be more likely to favor inflation?
Debtors.
If the actions of the government consistently favor inflation would you expect the minority of the voters to be creditors or debtors?
Creditors
Who would be more likely to favor inflation debtors or creditors?
A debtor would favour inflation; the debt would be repaid with money which is worth less than when it was borrowed.
What is the definition of debtors and creditors?
Debtors are people who owe money to creditors. Creditors are people who are owed money by debtors. For example, the bank is a creditor allowing people to take out loans and the people taking out the loans are the debtors.
Format for Debtors control account and creditors control account?
debtors
What is debtors and creditors?
Loaners and borrowers
What is the difference between Sundry debtors And Sundry Creditors?
Sundry Debtors are from whom we have to take money and to sundry creditors we owe money.
What is difference between sundry debtors and sundry creditors?
Sundry Debtors are from whom we have to take money and to sundry creditors we owe money.
Do creditors favor inflation?
no
What was the name for a society where debtors were bound to their creditors in servitude?
That system was called debt bondage or debt servitude, where debtors were forced to work for their creditors until the debt was paid off.
What is experienced by debtors when inflation happen?
for the class of debtors, inflation advantageous as they area allowed to pay its debts with money of its purchasing power is lower than when they borrow
How to calculate DP ratio?
Stock+debtors-creditors/sale
