Which of the following is a cost of unanticipated inflation?
A) Debtors are made worse off.
B) Both debtors and creditors are made worse off.
C) The degree of risk associated with investments in the economy decreases.
D) Creditors are made worse off.

Question

Quizplus · Accepted Answer

Unanticipated inflation causes creditors to receive repayment in dollars that are worth less than what they had loaned, resulting in a decrease in the real value of their assets. This means that creditors are made worse off.

Which of the Following Is a Cost of Unanticipated Inflation