If the Rate of Inflation in a Given Time Period

question 93

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 the above.

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