The Basic consequence of effect of inflation is decrease in buying power of monetary unit and its depreciation. The this depreciation especially hardly beats on pensioners, with their fixed income because on money received by them it is possible to acquire the goods and services hardly less, than last month. Those people who lives not under the fixed incomes, have more possibilities to cope with inflation because they can increase the taxes simply.
An inflation Consequence as, fast change of habits of consumers and investors is. During inflation people tend to spend less, therefore production should dismiss the workers because of decrease in orders. A destabilising consequence of inflation is also that some people speculate with significant means in attempt to use advantages of a high level of the prices.
At last, inflation result ins to revenue distribution change. Creditors lose the money, during the long inflationary periods as the loans made earlier, are reimbursed later in "exaggerated" dollars.
Inflation - overall price level increase in certain rate. As a matter of fact, it means that cost of your money goes downwards, and it is required more and more money to purchase certain things. Therefore 4 %-s' development of inflation means that the price level within the this year has raised on 4 % since the certain period of measurement (1982 now is used). The Rate of inflation is defined by a difference finding between price levels flowing and previous year. For price level measurement, economists use such factors, as a consumer price index.