Questions

Creditors and debtors:

During inflation creditors lose because they receive in effect less in goods and services than if they had received the repayments during a period of low prices. Debtors, on other hand, as a group gain during inflation, since they repay their debts in currency that has lost its value.The aggregate volume of internal trade tends to increase during inflation due to higher incomes, greater production and larger spending. But the export trade is likely to suffer on account of arise in the prices of domestic goods.

The same currency unit will now buy less goods and services.But the bondholders lose as they get a fixed interest the real value of which has already fallen.

The Camphor slowly dissolves in the water lowering the latter's surface tension in the immediate neighbourhood. The stronger pull exerted by the uncontaminated portion of water brings about a movement of the surface and the camphor particles are carried along with it. When after sometime the whole surface settles for the reduced tension, the movement of the camphor too short.