The Redistribution Effect That Arises from an Unanticipated Increase in Inflation

question 10

Multiple Choice

The redistribution effect that arises from an unanticipated increase in inflation will affect

• A)insurance contracts
• B)cash holdings
• C)people who own fixed rate bonds
• D)all of the above
• E)only B and C

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Definitions:

Customers

People or organizations that buy products or services from a company.

Liability

An obligation a company owes to others, such as loans, accounts payable, or mortgages, which must be settled over time through the transfer of economic benefits.

Future Outflow

Projected cash payments or disbursements that a business expects to incur as a result of current operations or future activities.

Resources

Resources are materials, energy, services, staff, or other assets that are utilized to produce goods and services, effectively supporting business operations.