Asked by Harry Nayan on May 06, 2024
Verified
Wealth is redistributed from creditors to debtors when inflation is
A) high, whether it is expected or not.
B) low, whether it is expected or not.
C) unexpectedly high.
D) unexpectedly low.
Redistribution
The transfer of income, wealth, or resources from certain individuals or groups to others by means of a social mechanism such as taxation, charity, welfare, or public services.
Unexpectedly High
A term describing something that surpasses anticipated levels or estimates, often leading to surprise or a need for adjustment.
- Examine the effects of inflation on the redistribution of wealth among creditors and debtors.
Verified Answer
QQ
Qusai QwasmehMay 11, 2024
Final Answer :
C
Explanation :
Wealth is redistributed from creditors to debtors when inflation is unexpectedly high because the real value of the money that debtors owe is less than what was anticipated at the time the loan was made. Creditors receive less in real terms than they expected, benefiting debtors.
Learning Objectives
- Examine the effects of inflation on the redistribution of wealth among creditors and debtors.