If the Bank of Canada were to unexpectedly increase the money supply,creditors would gain at the expense of debtors.

Question

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If the Bank of Canada were to unexpectedly increase the money supply, it would lead to inflation and a decrease in the purchasing power of money. This would mean that creditors (lenders) would be at a disadvantage, as they would be repaid with money that has less value. Debtors (borrowers), on the other hand, would benefit from the unexpected increase in the money supply, as they would be repaying their loans with money that has less purchasing power. Therefore, debtors would gain at the expense of creditors, not the other way around.

If the Bank of Canada Were to Unexpectedly Increase the Money