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.

Question

Quizplus · Accepted Answer

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.

Wealth Is Redistributed from Creditors to Debtors When Inflation Is