With Unanticipated Inflation

question 49

Multiple Choice

With unanticipated inflation,

• A)creditors are hurt unless they have an indexed contract,because they get less than they expected in real terms.
• B)creditors with indexed contracts gain,because they receive more than they contracted for in nominal terms.
• C)debtors with an unindexed contract lose,because they pay exactly what they contracted for in nominal terms.
• D)debtors with an indexed contract are hurt,because they pay more than they contracted for in nominal terms.
• E)debtors with an indexed contract are hurt,because they pay more than they contracted for in real terms.

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Definitions:

Resistant

The quality of being opposed to or defending against something, such as change, disease, or certain materials and substances.

Ideas

Mental concepts or thoughts that represent a person's understanding or imagination, which can be the basis for creativity, problem-solving, and innovation.

Constructive

Describes feedback or criticism that is intended to be helpful and aimed at improving or building upon something.

Teamwork

The collaborative effort of a group to achieve a common goal or to complete a task in the most effective and efficient way.