Unanticipated inﬂation beneﬁts debtors at the expense of creditors.

Name: Unanticipated inﬂation beneﬁts debtors at the expense of creditors.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Unanticipated inflation decreases the real value of debt, which benefits debtors (as they pay back less in real terms). However, creditors (such as banks or individuals who have lent money) lose out as the real value of the money they receive back decreases.

Unanticipated Inﬂation Beneﬁts Debtors at the Expense of Creditors