In the Case of an Unanticipated Inflation

question 112

Multiple Choice

In the case of an unanticipated inflation:

• A) creditors with an unindexed contract are hurt because they get less than they expected in real terms.
• B) creditors with an indexed contract gain because they get more than they contracted for in nominal terms.
• C) debtors with an unindexed contract do not gain 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.

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Definitions:

Sense of Idealism

The capacity or tendency to envision things in their perfect form or to pursue ideals, often manifesting in young adults as a desire to improve the world.

Personal Fable

A concept in adolescent psychology where an individual believes their thoughts, feelings, and experiences are unique and exceptional.

Sense of Autonomy

An individual's perception of their capacity to make independent choices and exercise control over their own life.