How Are Debtors and Creditors Affected When the Economy Unexpectedly

question 111

Multiple Choice

How are debtors and creditors affected when the economy unexpectedly goes from inflation to deflation?

• A) Debtors and creditors would both have reduced real wealth.
• B) Debtors and creditors would both have increased real wealth.
• C) Debtors would gain at the expense of creditors.
• D) Creditors would gain at the expense of debtors.

---

Definitions:

Maximum Potential Value

The highest theoretical value an investment or business project can achieve under optimal conditions.

Simulation Analysis

A method that uses a model to replicate complex systems and predict their behavior under different scenarios.

Scenario Analysis

A method of examining potential future occurrences by evaluating different possible results or scenarios.