Inflation and Deflation. Economics

CFA Level III Economics
#1

Within economics reading it says that within stock market, higher inflation benefits firms that can pass along rising costs whereas in deflation is especially detrimental for asset intensive, commodity producing and highly leveraged firms.

They discuss asset intensive, commodity producing with deflation but I’m assuming these pass along costs in higher inflation and benefit there? The sentence is written odd so wanted to make sure.

Basically, asset intensive, commodity producing and highly leveraged do well in higher inflation and do poorly in deflation…correct?

#2

I would just think about whether they can pass along the inflationary costs to customers in an inflationary environment.

In a deflationary environment, equities generally decline.