If the Rate of Inflation in a Given Time Period

question 11

Multiple Choice

If the rate of inflation in a given time period turns out to be higher than lenders and borrowers anticipated, then the effect will be:

• A)a redistribution of wealth from borrowers to lenders.
• B)a net gain in purchasing power for lenders relative to borrowers.
• C)no change in the distribution of wealth between lenders and borrowers.
• D)none of these.

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Definitions:

Risky-Shift

A phenomenon where a group collectively decides on a course of action that is more extreme than they would have made individually.

Deindividuation

A state of reduced individuality, reduced self-awareness, and reduced attention to personal standards; this phenomenon may occur when people are part of a group.

Groupthink

A psychological phenomenon where a group's desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Social Loafing

The tendency for people to work less hard in a group than when working alone.