Unanticipated inflation tends to penalize:
A)people who save money in financial institutions.
B)individuals who borrow money from financial institutions.
C)businesses which borrow money from financial institutions.
D)governments which have a progressive personal income tax.

Question

Quizplus · Accepted Answer

Unanticipated inflation tends to penalize people who save money in financial institutions because their savings lose value as the purchasing power of their money decreases. Inflation erodes the value of money over time, resulting in a decrease in the real value of savings. As a result, savers lose purchasing power and find it difficult to maintain their standard of living.

Unanticipated Inflation Tends to Penalize