All of the Following Are True for Inflation EXCEPT

question 81

Multiple Choice

All of the following are true for inflation EXCEPT:

• A) those on a fixed income lose purchasing power during inflationary periods.
• B) creditors do not receive the full amount of a loan because the principle and interest rates are fixed.
• C) debtors are hurt during inflationary times because the amount they pay creditors back increases.
• D) increased prices due to high inflation cause consumers to spend less money.

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Definitions:

Parent

A company that controls other companies (subsidiaries) through ownership of more than half their voting stock or by having a significant influence over them.

Equity Method Investments

An accounting technique used to record investments in which the investor has significant influence over the investee but does not control it outright, typically through the ownership of 20% to 50% of the voting stock.

Cash Dividends

A financial distribution in the form of cash from a corporation to its investors as profits.

Dividend Revenue

Income received from owning shares in a company when the company decides to distribute some of its earnings to shareholders.