The redistributive effects of high inflation rates tend to favor
A) the saver who keeps money in a cookie jar.
B) those who work under long-term contracts.
C) no one because the prices of goods and services rise.
D) pensioners and others who live on fixed incomes.
E) speculators in assets such as land, art, and bullion.

Question

Quizplus · Accepted Answer

High inflation tends to erode the value of money, negatively impacting savers, those on fixed incomes, and individuals under long-term contracts due to the decreased purchasing power of their income or savings. Speculators in tangible assets like land, art, and bullion may benefit because the value of these assets often rises with inflation, offering potential for profit.

The Redistributive Effects of High Inflation Rates Tend to Favor