Inflation that is higher than expected redistributes wealth from
A)employers to employees under nominal wage contracts.
B)borrowers to lenders.
C)lenders to borrowers.
D)the federal government to taxpayers.

Question

Quizplus · Accepted Answer

Inflation that is higher than expected reduces the real value of money. This means that the amount of money borrowers have to pay back is worth less in real terms than it was at the time the loan was taken out. As a result, lenders receive less in real value than they expected, effectively redistributing wealth from lenders to borrowers.

Inflation That Is Higher Than Expected Redistributes Wealth from