Who are the typical winners and losers in an inflation and how does Essay

Who are the typical winners and losers in an inflation and how does inflation make them winners or losers - Essay Example Stockholders will benefit from a higher inflation as the factors that increase the price of goods also increases the values of companies (Money Expert 7). Also, as prices of products increase, owners of small businesses will be in a position to manage fixed-rate debt from investments in different business requirements. Citizens who earn low incomes may find it tough during the times of inflation. Low-income earners tend to have their wealth in cash unlike the wealthy who invest in real and financial assets. Low-income earners face challenges because inflation affects the value of their primary asset, which is cash (Money Expert 9). When a country faces inflation, the value of money goes down, and people tend to spend often since they have to spend all the money in their possession. The people on fixed incomes will find it challenging when inflation is high; unanticipated inflation on fixed income earners will make their income go down. High inflation also affects the economy of a country since the consuming power of citizens goes down while the standard of living reduces (Miller