All of the following are true for inflation EXCEPT:
A) those on a fixed income lose purchasing power during inflationary periods.
B) creditors do not receive the full amount of a loan because the principle and interest rates are fixed.
C) debtors are hurt during inflationary times because the amount they pay creditors back increases.
D) increased prices due to high inflation cause consumers to spend less money.

Question

Quizplus · Accepted Answer

Debtors benefit during inflationary times because they repay loans with money that is worth less than when they borrowed it, effectively reducing the real value of their debt.

All of the Following Are True for Inflation EXCEPT