If there are no restrictions on contracts,and if all parties in the economy accurately predict the rate of inflation over the next year,then
A) there will be no redistribution of purchasing power
B) purchasing power will be redistributed from wage earners to business owners
C) purchasing power will be redistributed from business owners to wage earners
D) purchasing power will be redistributed from lenders to borrowers
E) purchasing power will be redistributed from borrowers to lenders

Question

Quizplus · Accepted Answer

If all parties accurately predict the rate of inflation, then they will factor it in their contracts and negotiations. This means that there will be no unexpected surprises or redistributions of purchasing power as everyone will have understood the consequences of the inflation rate. Therefore, there will be no need for any specific redistribution.

If There Are No Restrictions on Contracts,and If All Parties