All of the Following Are True for Unanticipated Inflation EXCEPT

question 26

Multiple Choice

All of the following are true for unanticipated inflation EXCEPT

• A) those on a fixed income lose purchasing power during inflationary periods.
• B) creditors do not receive the full purchasing power from a loan because the principle and interest rate 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:

Proportional Adjustment

A method of modifying figures or rates in such a way that the relationship between them remains constant.

Annual Budget

A financial plan for a year that estimates income and expenditures for the said period.

Currency Exchange Rates

How much one currency is valued when converting to a different currency.

Estate Distribution

The process of dividing and allocating an individual's assets and properties after their death, according to their will or the laws of intestacy.