E31- Causes & Effects of Inflation, Measures to Check Inflation |Nitin Singhania Indian Economy UPSC

[@ankitsaxena6925]

Thank you sir 🎉😊

[@skamerul5621]

🙏

[@amitrathod8904]

Thank you😊

[@ankitsaxena6925]

I can not understand the inflation premium ? Sir

[@Harsh_UPSC]

Ex: 1 Lakh loan @ 12% Interest Rate (Inflation - lets say 10% in that year)
u have to pay - 112000 (But bcoz of inflation ur 1 Lakhs value is now 110000)
so in reality... u r just paying 2000 as interest... bcoz ur value of money increased by 10000 due to inflation... this 10000 is ur Inflation Premium

[@ankitsaxena6925]

@@Harsh_UPSCnow understand sir. Thank you sir 😊