If actual inflation is greater than the expected rate of inflation, then probably
A)the borrowers are made better off than lenders.
B)the borrowers are made worse off than lenders.
C)creditors gain at the expense of borrowers.
D)savings accounts have increased in real terms.

Question

Quizplus · Accepted Answer

When actual inflation is greater than the expected rate, borrowers benefit because they repay their loans with money that is worth less than anticipated, making them better off relative to lenders.

If Actual Inflation Is Greater Than the Expected Rate of Inflation