Who stands to gain as a result of unanticipated inflation?
A) Creditors
B) Debtors
C) Persons living on a fixed income
D) Retired individuals

Question

Quizplus · Accepted Answer

Debtors benefit from unexpected inflation because their debt payments remain the same in nominal terms, but the value of the currency they are repaying with decreases, reducing the real value of their debt.

Answer: A and D
 Creditors and persons living on a fixed income are negatively impacted by unexpected inflation. The value of the money they are receiving decreases, reducing the purchasing power of their income and assets. This can be particularly harmful for retired individuals who rely on their savings to support themselves during retirement.

Who Stands to Gain as a Result of Unanticipated Inflation