Inflation is the rate of change of average prices in the economy.In general,we can say that inflation
A)benefits creditors if it is unanticipated.
B)has no real effects if it is unanticipated.
C)increases the purchasing power of money.
D)reduces the real value of existing nominal debt.
E)increases the real value of fixed money incomes.

Question

Quizplus · Accepted Answer

Inflation reduces the purchasing power of money and therefore reduces the real value of existing nominal debt, benefiting creditors who receive repayment in dollars that are worth less than when the loan was made.

Inflation Is the Rate of Change of Average Prices in the Economy.In