High inflation redistributes wealth from:
A)those who save to those who borrow.
B)those who borrow to those who save.
C)those who borrow to banks.
D)banks to those who save.

Question

Quizplus · Accepted Answer

High inflation reduces the value of money, which means that the prices of goods and services increase. Those who have saved money will see the value of their savings decrease in real terms, whereas those who borrow will have to repay their loans with money that is worth less than when they took out the loan. Therefore, high inflation redistributes wealth from those who save to those who borrow.

High Inflation Redistributes Wealth From