If the inflation rate in an economy is higher than expected,which of the following groups in the society would be most likely to gain?
A)Borrowers
B)Lenders
C)Persons holding large amounts of money
D)Persons on fixed incomes
E)Workers under contract without a cost of living adjustment

Question

Quizplus · Accepted Answer

Inflation erodes the real value of debt, so borrowers benefit from unexpected inflation as they payback their loans in dollars with lower purchasing power. Their debt burden decreases, and they can use the savings to invest or spend elsewhere.

If the Inflation Rate in an Economy Is Higher Than