If the Rate of Inflation in a Given Time Period

question 66

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) no change in the distribution of wealth between lenders and borrowers.
• B) a net gain in purchasing power for lenders relative to borrowers.
• C) a redistribution of wealth from borrowers to lenders.
• D) a redistribution of wealth from lenders to borrowers.

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Definitions:

Third-Party

An individual or group besides the two primarily involved in a contract or transaction.

Parol Evidence Rule

A legal principle that prevents parties from presenting extrinsic evidence that contradicts or adds to the written terms of a contract.

Exceptions

Specific conditions or circumstances that alter or nullify the general rule or application of a law.

Contractual Rights

The specific legal rights and obligations that are established by a contract between two or more parties.