Unanticipated inflation:
A)hurts people whose income is fixed.
B)hurts borrowers and helps lenders.
C)helps people whose income is fixed.
D)helps savers.

Question

Quizplus · Accepted Answer

Unanticipated inflation hurts people whose income is fixed because their purchasing power decreases as prices rise. On the other hand, it can help borrowers by allowing them to repay debts with less valuable money and hurt lenders who have lent money at a fixed interest rate. It also hurts savers because the money they have saved may not have the same purchasing power in the future when prices have increased.

Unanticipated Inflation