Generally speaking,which of the following groups would tend to gain real income from the wealth effects of inflation?
A)People with fixed income.
B)People who have passbook savings accounts at fixed rates of interest.
C)People who own assets that are appreciating faster than the inflation rate.
D)People who hold all of their assets in the form of cash.

Question

Quizplus · Accepted Answer

People who own assets that appreciate faster than the inflation rate will gain real income from the wealth effects of inflation. As the general price level increases, the value of their assets will also increase, providing them with a higher real income.

Generally Speaking,which of the Following Groups Would Tend to Gain