________ Would Be Helped by Unexpected Inflation

question 68

Multiple Choice

________ would be helped by unexpected inflation.

• A) Someone who loaned money out at a fixed interest rate
• B) Someone who signed a two-year contract at a fixed wage
• C) Someone who borrowed money at a fixed interest rate
• D) A worker whose wage increases with expected inflation
• E) Elderly individuals on a fixed income

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Definitions:

Additional Cost

The extra cost that is incurred when an economic agent decides to increase the level of an activity or purchase.

Labor Market

The marketplace in which individuals offer their labor for employment and employers seek to hire labor to fill available positions.

Resource Market

The market where resources or inputs such as labor, capital, and raw materials are bought and sold.

Rational Decision Maker

An individual or entity that makes choices that maximize benefits while minimizing costs, based on available information and logical analysis.