One cost of an unanticipated inflation is that it
A)transfers wealth from lenders to borrowers.
B)transfers wealth from borrowers to lenders.
C)decreases menu costs.
D)increases the purchasing power of money.

Question

Quizplus · Accepted Answer

Unanticipated inflation benefits borrowers because they can repay their loans with money that is worth less than when they borrowed it, effectively transferring wealth from lenders to borrowers.

One Cost of an Unanticipated Inflation Is That It