Unanticipated inflation redistributes income across groups in society.Which of the following people are among the winners?
A) people who loan money
B) people on fixed incomes
C) people who are small savers
D) people who borrow money at fixed interest rates

Question

Unanticipated inflation redistributes income across groups in society.Which of the following people are among the winners?  
A) people who loan money 
B) people on fixed incomes 
C) people who are small savers 
D) people who borrow money at fixed interest rates

Quizplus · Accepted Answer

People who borrow money at fixed interest rates are the winners during unanticipated inflation because they get to repay the borrowed money with less valuable currency. As a result, the lender loses out, and the borrower gains.

Unanticipated Inflation Redistributes Income Across Groups in Society