How can inflation affect poverty? How is inflation and poverty related?

Question

both in the Philippines and in other countries

Answer 1

when price goes up people becoe poor simple as that

Answer 2

The people that benefit most from inflation are those that have large debts, especially those at a fixed interest rate.  As prices rise, so must wages, at least for employment where there are alternatives for the worker to go elsewhere.  People who have large debts are usually not the same folks as we consider "poor", as poor people do not normally qualify for large loans.

Wealthy people often have investment options to protect themselves from some of the effects of inflation.  When inflationary pressures appear, the astute investor shifts out of those investments likely to suffer, and go to instruments that will keep pace with inflation, thus protecting themselves from some of the damage inflation might otherwise inflict on their portfolio.

So, since pay increases normally lag behind inflation, and often do not catch up to price increases, the poor, who normally spend 100% of their income on those things most affected by inflation, tend to be hurt by inflation to a larger degree than large debtors, or investors who can shift assetts to gold or other commodities that typically keep pace with inflation.

Answer 3

If inflation occurs (prices on all goods throughout an economy go up) but wages remain the same, extra financial stress is placed on people to buy the same products they were able to buy before.

For example, say you make $6 US dollars an hour at your job, perhaps this is minimum wage where you live. If you work for five hours and make $30 dollars, let's say hypothetically this $30 dollars will buy you exactly a full tank of gas if gas was at about $2.50/gal. But if the price of gas inflates to $4+, you would no longer be able to fill the same tank of gas you could fill before with five hours of wages.

Also, with the inflation of gasoline prices, ALL product prices are inflating becasue it takes gasoline to transport nearly all goods, whether by plane, train, or boat. So not only does gas cost more, food is costing more too, etc.

This is how inflation takes a toll on people who are already struggling to live paycheck-to-paycheck, and may plunge these people who were doing fine before into poverty, since they cannot afford the goods they once were able to.

Hope this helps.

Answer 4

when there is inflation, which is when prices of products or good go up or increase, people will have a difficult time affording products. hence, poverty arises.

for example, when the price of food product go up, people in the lower class will have a harder time to afford them which can lead to poverty.

Answer 5

inflation occurs when there is a rise in prices and money loses it value and when it loses its value, it can only but less hence people will become poor because the money they earn will continue to be the same unless they get a raise while the price of goods and services they need will continue to increase and they will only be able to afford less.

Answer 6

The burden of inflation, President Nixon has often said, falls heavily upon the poor, "who are largely defenseless" against price increases on the necessities of life.

In today's times, when inflation has increased so much, we should unite to help out the poor. There are organizations which are working in this field. But as an individual, I came across a community through which I could efficiently contribute. The community http://www.orkut.co.in/Community.aspx?cm... is about the United Nations' campaign to End Poverty by 2015. The campaign revolves around 8 major goals which, if accomplished, would ensure eradication of poverty.

Answer 7

inflation is when prices go up. this can be due from the value of a dollar. if the value of the dollar goes down then the price of products will go up. this is because ti will take more dollars to make the product. since it will cost more money to make the product, the prices will go up. since prices are going up because of the low dollar value, it costs more to live.

Ex. someone makes a standard $40,000 annual salary. it costs them $37,000 to pay all the bills (taxes, food ect.). if inflation occurs, then it might cost $41,000 to pay the bills. since the prices went up that means the bills are. that means people have less to spend. because of this people are running low on money, that leads to poverty.

Answer 8

In today's times, when inflation has increased so much, we should unite to help out the poor.