Based on the News Wire article titled "Inflation and the Weimar Republic," which of the following is the best illustration of the wealth effect of inflation?
A) "… businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way.The cash they'd allocated for the entire trip barely sufficed to pay the way to the next stop."
B) "Workers were often paid daily and sometimes two or three times a day …"
C) "Debtors sought out creditors to pay them in valueless currency."
D) "Profits fell as employees demanded frequent wage adjustments.

Question

Quizplus · Accepted Answer

The illustration of debtors seeking out creditors to pay them in valueless currency shows the wealth effect of inflation, where people with debts benefit from inflation as it reduces the real value of their debt. In this case, debtors were seeking out creditors to pay them in the devalued currency, which would reduce the real value of their debt.

Based on the News Wire Article Titled "Inflation and the Weimar