Suppose That Anticipated Inflation Is 4% for the Coming Year

question 141

Multiple Choice

Suppose that anticipated inflation is 4% for the coming year, with loan contracts set at 7% with the expectation of a 3% return after inflation. If the actual inflation rate at the end of the year is 2%

• A) creditors gain at the expense of debtors.
• B) people on a fixed income see the purchasing power of their incomes rise.
• C) debtors gain at the expense of creditors.
• D) there is a redistribution of income from creditors to debtors.

---

Definitions:

Self-Concept

An individual's perception of themselves, including beliefs about one’s abilities, appearance, and personality.

Carl Rogers

A prominent American psychologist known for establishing client-centered therapy and highlighting the significance of self and unconditional positive acceptance.

Experiencing Anxiety

The feeling of worry, nervousness, or unease typically about an imminent event or something with an uncertain outcome.

Incongruence

A psychological state characterized by a discrepancy between an individual's self-perception and their actual experience, leading to discomfort and anxiety.