If inflation turns out to be higher than was anticipated,debtors are helped because

Name: If inflation turns out to be higher than was anticipated,debtors are helped because
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If inflation is higher than anticipated, the purchasing power of money decreases. This means that the real value of the amount owed to the debtor also decreases. As a result, debtors are benefited because the real present value of their payments decreases. Therefore, option B is the correct choice.

If Inflation Turns Out to Be Higher Than Was Anticipated,debtors