Creditors are likely to benefit from unexpected inflation.

Question

Quizplus · Accepted Answer

Creditors lend money and receive payments in the future, usually with interest. Unexpected inflation reduces the value of money over time, so the payments received by the creditors will have less purchasing power than they anticipated. Therefore, unexpected inflation is detrimental for creditors, not beneficial. On the other hand, unexpected inflation can benefit debtors, as they can pay back their loans with "cheaper" money.

Creditors Are Likely to Benefit from Unexpected Inflation