The impact of inflation has a dual nature. It not only increases the cost of living, weakens corporate profits and widens the gap between the rich and the poor, but also may stimulate economic growth within a moderate range.lts core effects include a decline in purchasing power, a reduction in the real value of debt, a distortion in resource allocation and an imbalance in social structure. The cost of living has risen significantly Inflation directly leads to a decline in the purchasing power of money, and the quantity of goods that can be purchased with the same amount of money decreases. For instance, a commodity that originally costs 100 yuan might require 110 yuan to purchase. This has a greater impact on low-income groups, as their consumption expenditure accounts for a higher proportion of their income. Impaired economic efficiency . Corporate profit pressure : Cost-push inflation forces companies to raise product prices, which may lead to a decline in sales and profit squeeze. Declining export competitiveness : Rising domestic prices push up export commodity prices, weakening international market Share. Social distribution imbalance. Inflation exacerbates the wealth gap: high-income groups hedge against inflation through the appreciation of assets (such as real estate and gold), while low-income groups, relying on wage income and the depreciation of savings, experience a more severe shrinkage of their actual wealth.

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