What is the result of an unanticipated increase in inflation?
A)a redistribution of income from employers to workers
B)a redistribution of income from lenders to borrowers
C)a redistribution of income from governments to taxpayers
D)a redistribution of income from borrowers to lenders

Question

Quizplus · Accepted Answer

An unanticipated increase in inflation benefits borrowers at the expense of lenders because money that borrowers repay lenders is worth less than when it was borrowed. This leads to a redistribution of income from lenders to borrowers.

What Is the Result of an Unanticipated Increase in Inflation