(i) Causes economic retardation since the citizens will not be willing to invest or increase their investment activities.
(ii) Leads to adverse B.O.P due to increase in the imports that are now cheaper yet exports are expensive.
(iii) Loss of confidence in the country's monetary system.
(iv) Reduced savings since people are forced to spend/ consume all their income because of the increased prices.
(v) Reduction in profits due to reduced sales.
(vi) Wastage of time comparing prices.
(vii) Conflicts between employers and employees over increase in pay.
(viii) Lowers people's purchasing power hence decline in standards of living.
(ix) Loss to creditors since they are paid when the money has already lost value.
maurice.mutuku answered the question on July 10, 2017 at 06:42
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