Money Supply- the amount of money in the national economy
When the government increases the supply of money, the value of the dollar decreases. This is an example of inflation.
Someone who borrows money benefits from inflation. This is because the money they owe is worth less than the money borrowed.
Someone who sells goods, such as a farmer, is then able to raise their prices.
Deflation- a drop in the prices of goods.
Money lenders benefit from deflation, rather than borrowers. This is because the money they receive has more worth than the money they lent out.