In which direction does a surge of inflation redistribute wealth?
A) from private corporations to the government
B) from lenders to borrowers
C) from the rich to the poor
D) from consumers to producers
E) from workers to managers

Question

Quizplus · Accepted Answer

Inflation redistributes wealth from lenders to borrowers as the value of money decreases over time, but the borrower must still repay the lender at the original loan amount. This means that borrowers effectively pay back less in real terms than they initially borrowed, while lenders receive less valuable money in return.

In Which Direction Does a Surge of Inflation Redistribute Wealth