Which one of the following groups benefits from inflation?
A) Borrowers.
B) Savers.
C) Landlords.
D) Lenders.

Question

Quizplus · Accepted Answer

Borrowers benefit from inflation because inflation reduces the real value of the debt they owe, making it easier to repay with less valuable currency. For example, if a borrower takes out a loan for $100,000 at a fixed interest rate of 5%, inflation of 2% would reduce the real value of the debt to $98,000, thereby reducing the burden of the debt.

Which One of the Following Groups Benefits from Inflation