Why Are Creditors Harmed by Unexpected Inflation

question 58

Multiple Choice

Why are creditors harmed by unexpected inflation?

• A)Creditors receive lower nominal rates of interest when prices rise.
• B)Creditors are paid back with more valuable dollars.
• C)Creditors receive higher nominal rates of interest when prices rise.
• D)Creditors are paid back money with less spending power than when it was originally loaned out.

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Definitions:

Temperature Reading

The measurement of the body's internal heat level, typically done with a thermometer to assess health or detect fever.

Patient Safety

The prevention of harm to patients during the course of healthcare delivery.

Hypothalamus

A region of the brain that controls an enormous number of bodily functions, including temperature regulation, thirst, hunger, sleep, mood, and sexual desire.

Vital Sign

A measurable indicator of the body's essential functions, typically including heart rate, blood pressure, temperature, and respiratory rate.