Which of the following are consequences of inflation?
A)It increases the burdens on people with fixed incomes when inflation is not anticipated.
B)It hurts savers who did not anticipate how high the inflation was, but helps those who have borrowed at a fixed rate before the inflation became apparent.
C)Inflation imposes costs on people who devote resources to protecting themselves from expected inflation.
D)all of the above

Question

Which of the following are consequences of inflation?
A)​It increases the burdens on people with fixed incomes when inflation is not anticipated.
B)​It hurts savers who did not anticipate how high the inflation was, but helps those who have borrowed at a fixed rate before the inflation became apparent.
C)​Inflation imposes costs on people who devote resources to protecting themselves from expected inflation.
D)​all of the above

Quizplus · Accepted Answer

All three options are consequences of inflation. Inflation can harm people with fixed incomes as their purchasing power diminishes. Savers who did not anticipate inflation suffer losses on real value of their savings. And people devote resources to protect themselves from expected inflation which is a cost.

Which of the Following Are Consequences of Inflation