Unanticipated inﬂation arbitrarily
A) helps those who are minimum wageworkers.
B) harms those who receive ﬁxed money incomes.
C) harms those who borrow money.
D) helps those who save money.

Question

Quizplus · Accepted Answer

Unanticipated inflation harms those who receive fixed money incomes, as their purchasing power decreases. Minimum wage workers do not necessarily benefit from inflation, especially if their wages do not keep up with the rate of inflation. Borrowers may benefit from inflation if they have fixed interest rates, as the value of their debt decreases. However, savers lose out on the value of their savings as inflation erodes the purchasing power of their money.

Unanticipated Inﬂation Arbitrarily