Which of the following do not suffer the costs of inflation?
A)persons on fixed incomes
B)persons whose incomes rise more rapidly than inflation
C)firms that have to devote more time and labor to raising prices
D)an investor that has to pay higher taxes because of the inflation

Question

Quizplus · Accepted Answer

Persons whose incomes rise more rapidly than inflation will not suffer the costs of inflation because their purchasing power remains the same or even increases. A, C, and D all suffer the costs of inflation. Persons on fixed incomes will see their purchasing power decline as their income stays the same but the prices of goods and services increase. Firms that have to devote more time and labor to raising prices will also suffer due to higher costs of doing business. An investor that has to pay higher taxes because of inflation is also suffering since the value of their investment is being eroded by inflation.

Which of the Following Do Not Suffer the Costs of Inflation