If the inflation rate in an economy is higher than expected, which of the following groups in the society would be most likely to gain?
A) borrowers
B) lenders
C) persons holding large amounts of money
D) persons on fixed incomes
E) workers under contract without a cost-of-living adjustment

Question

Quizplus · Accepted Answer

If the inflation rate is higher than expected, the value of money decreases, making it easier for borrowers to pay back loans with less valuable currency. This gives an advantage to borrowers over lenders, who lose out on the value of the money lent out.

If the Inflation Rate in an Economy Is Higher Than