What does inflation have to do with wealth redistribution?
A) Borrowing money has less cost, since you are paying the loan back with less purchasing power; wealth flows from lender to borrower.
B) Loaning money has less cost, since you are receiving loan payments that have less value; wealth flows from borrower to lender.
C) Since inflation is low, there is no impact of inflation on wealth redistribution.
D) Lenders gain at the expense of borrowers.
E) Pawn shops gain more at the expense of poor people.

Question

Quizplus · Accepted Answer

Inflation reduces the purchasing power of money, so borrowers repay loans with money that is worth less than when they borrowed it, effectively transferring wealth from lenders to borrowers.

What Does Inflation Have to Do with Wealth Redistribution