What is the result if inflation increases unexpectedly?
A)lenders lose
B)borrowers lose
C)lenders gain and borrowers gain
D)neither borrowers nor lenders lose

Question

Quizplus · Accepted Answer

When inflation increases unexpectedly, the value of money decreases, meaning the amount paid back by borrowers is worth less in real terms. This situation benefits borrowers at the expense of lenders, who receive less valuable repayments than anticipated.

What Is the Result If Inflation Increases Unexpectedly