Asked by Misael Aneuris on May 21, 2024
Verified
Each of the following people would be hurt by unanticipated inflation except
A) long-term bondholders.
B) debtors.
C) landlords who have granted long-term leases.
D) retired people on fixed pensions.
Unanticipated Inflation
Inflation that occurs when businesses and individuals are unable to accurately predict the rate of inflation, leading to potential economic distortions and uncertainties.
Long-Term Bondholders
Individuals or entities that invest in bonds with maturities typically longer than 10 years.
Debtors
Individuals or entities that owe money to others; they are the borrowers in financial transactions.
- Understand the effect of unanticipated inflation on various economic actors.
Verified Answer
SR
Shobha RameshMay 27, 2024
Final Answer :
B
Explanation :
Debtors benefit from unanticipated inflation because they can repay their loans with money that is worth less than when they borrowed it. This effectively reduces the real value of the debt they owe.
Learning Objectives
- Understand the effect of unanticipated inflation on various economic actors.