By _____ the real value of payments that must be made, an increase in inflation typically is _____ for the borrowers in the economy.
A) increasing; beneficial
B) increasing; harmful
C) decreasing; beneficial
D) decreasing; harmful

Question

Quizplus · Accepted Answer

Inflation reduces the real value of money over time, meaning the amount borrowers have to pay back is worth less in real terms. This generally benefits borrowers as they pay back less in real value than they borrowed.

By _____ the Real Value of Payments That Must Be