Unanticipated inflation redistributes income across groups in society.Among the winners are
A)those who loan money
B)those on fixed incomes
C)small savers
D)those who borrow at fixed interest rates
E)those who hold large amounts of cash

Question

Quizplus · Accepted Answer

Those who borrow at fixed interest rates are the winners in unanticipated inflation since they are repaying their loans in dollars that are worth less than the dollars they borrowed. This results in a transfer of wealth from the lender to the borrower.

Unanticipated Inflation Redistributes Income Across Groups in Society