Which of the Following Is True of Unanticipated Inflation

question 14

Multiple Choice

Which of the following is true of unanticipated inflation?

• A) It hurts lenders because the purchasing power of the money they collect from their borrowers is now higher.
• B) It hurts borrowers because they repay their debts with money that is now worth more.
• C) It helps lenders because the purchasing power of the money they collect from their borrowers is now higher.
• D) It helps borrowers because they repay their debts with money that is now worth less.

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