A sudden increase in the U.S. price level
A) makes those with dollar debts worse off.
B) makes those with dollar debts better off.
C) do not affect those with dollar debts.
D) makes those with DM debt better off.
E) increases all dollar debts.

Question

Quizplus · Accepted Answer

A sudden increase in the U.S. price level (inflation) reduces the real value of money, making it easier for debtors to repay their dollar-denominated debts with less valuable dollars.

A Sudden Increase in the U.S. Price Level