Who is most likely to benefit by inflation?
A)retired people
B)lenders
C)borrowers
D)low-income consumers
E)government

Question

Quizplus · Accepted Answer

Borrowers are most likely to benefit from inflation because they can repay their loans with less valuable currency. As inflation increases, the value of money decreases, making it easier for borrowers to pay back their loans.

Answer: E 
 Governments may also benefit from inflation because it can help reduce the real value of their debt. If a government owes a significant amount of money, inflation can help erode the value of that debt over time. However, this benefit may be short-lived if inflation leads to other negative economic consequences.

Retired people (Choice A) and low-income consumers (Choice D) are less likely to benefit from inflation because it can erode the purchasing power of their fixed incomes. Lenders (Choice B) may also suffer from inflation because the money they receive back from borrowers is worth less than when it was initially lent out.

Who Is Most Likely to Benefit by Inflation