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How does deflation affect borrowers and lenders?

Borrowers who purchase assets will lose because, during deflation, assets lose their worth. During deflation, the lenders will not lend money as the interest rates will be low. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

Further readings:

  1. RBI – Know About Reserve Bank of India, Functions, Composition
  2. Monetary Policy Committee (MPC) – An Overview, Instruments of Monetary Policy

Related Links

Consumer Price Index (CPI) – Types of CPI, Calculation of CPI – Indian Economy Notes

Inflation Targeting: Methods, Drawbacks and Benefits

Previous Years Economy Questions in UPSC Mains General Studies Paper – 3

Cashless Economy in India – UPSC GS-III Notes

Monetary Policy – Objectives, Roles and Instruments (UPSC Indian Economy)

Union Budget 2021 – An Overview of Proposals on Six Different Pillars

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