ICSE Class 10 Answered

1. Impact on Production: A moderate rise in prices has a favorable impact or effect on production. This is because the increase in prices is more than the cost of production and this increases profit expectations.As a result businessman are induced to invest more resulting in higher output and employment generation.However it must be noted till the stage of full employment moderate inflation is beneficial for production

2.Impact on Farmers:
During inflation, farmers generally gain this is because they can get better prices for their crops. Another reason is that during inflation, debtors gain as the value of money falls and their burden is reduced. In this case since farmers are generally debtors as they borrow money to meet their needs hence like other debtors they also gain.