Question
Highlight four undesirable effects of inflation to the Kenyan economy.
Answer
i) Has adverse effects on contractual agreement for provision and supply of goods and services
ii) Weakens the value of the local currency
iii) Leads to decline in the standards of living for people earning fixed income
iv) Lenders lose to borrowers
v) Increases the cost in implementation of development projects/plans
vi) Leads to balance of payment deficits
Vii) Leads to fall in investment and increase level of unemployment
viii) High inflation rates lead to general industrial unrest
ii) Weakens the value of the local currency
iii) Leads to decline in the standards of living for people earning fixed income
iv) Lenders lose to borrowers
v) Increases the cost in implementation of development projects/plans
vi) Leads to balance of payment deficits
Vii) Leads to fall in investment and increase level of unemployment
viii) High inflation rates lead to general industrial unrest
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