Variable Inflation Hurts Both Debtors and Creditors Because

question 98

Multiple Choice

Variable inflation hurts both debtors and creditors because:

• A) inflation makes the money-fixed assets of creditors worth less.
• B) inflation makes the money-fixed liabilities of debtors worth less.
• C) most debtors and creditors are risk averse.
• D) most debtors and creditors are risk neutral.

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Definitions:

Openness to Experience

A personality trait characterized by a willingness to try new things and be open to new experiences and ideas.

Personality Factor

An aspect of personality that can be measured and represents significant variation among individuals.

Narrow-Minded

Having a limited or inflexible perspective, often unwilling to consider alternative ideas or viewpoints.

Patterns of Behavior

Repeated actions or reactions that occur in a predictable manner, often based on habits, culture, or psychological conditioning.