Quote from: Twentyonepaylots on August 09, 2023, 04:21:29 PM

Quote from: Sayeds56 on August 07, 2023, 03:40:01 PM

Quote from: AnonBitCoiner on August 05, 2023, 06:42:13 PM

Inflation does not effect only poor but its also a big threat for wealthy people and everything is of higher cost instead of vast amount of resources present in our country. May be the country's leader do not have any idea about the uses of these resources or may be they are scarcity of these resources but what I know is that here is abundant of gas, petroleum and water resources so they should worked on it to provide for each and every individual of a country.

You are absolutely right, inflation also affects wealthy individuals who run diverse businesses, as cost of doing business escalates when interest rates increase due to higher inflation rate. It is important to recognize that central banks continually strive to maintain inflation and interest rates at a reasonable level so that business can borrow money from banks at minimal rate to meet their financial requirements for business operations and growth. Achieving a balance between inflation and economic growth is an ongoing challenge for policy makers to ensure stability of the economy.

Exactly poor and wealthy people are both affected. For example, for a minimum wage earner, comparing the prices of goods and services, their wages may not catch up, decreasing their purchasing power. This can make it difficult for them to make ends meet and afford basic necessities, which means lesser consumers for the wealthy individuals who are in line with business industries. Either way, we cannot deny the fact that inflation can have a ripple effect on the economy as a whole.

They are both affected, but unequally. Inflation hits the poorest first because relative to their wealth or income they have to spend the most for food, housing, energy and mobility. This relative difference is absolutely important because the calculation is quite easy:

Person A earns $2,000 and pays $1000 for existential needs, inflation drives prices up by 100% while wages stagnate, now person A pays $2,000 out of $2,000 for existential needs.

Person B earns $20,000 and pays $2,000 for existential needs, all things equal, now person B pays $4,000 out of $20,000 for existential needs.

Person B doesn't only keep 80% of their income despite inflation, but person B could theoretically decrease the cost for existential needs by moving into a smaller apartment or selling the expensive car for a cheap car. Person A has nothing left after inflation and can't anything about their lifestyle either.