Redistribution of wealth is a microeconomic effect of inflation.
Assuming that buyers' nominal incomes remain constant,redistribution of wealth occurs because buyers of goods will be worse off and sellers will be better off when prices rise.

Question

Quizplus · Accepted Answer

Inflation can lead to an increase in prices, which means buyers (who have fixed nominal incomes) will have to pay more for the same goods. This can result in a redistribution of wealth from buyers to sellers who benefit from the higher prices. Therefore, the statement is true.

Redistribution of Wealth Is a Microeconomic Effect of Inflation