In what circumstances would lenders most beneﬁt?
A) when there is an unanticipated decrease in inﬂation
B) when there is an anticipated increase in inﬂation
C) when there is an unanticipated increase in inﬂation
D) when there is an anticipated decrease in inﬂation

Question

Quizplus · Accepted Answer

Lenders benefit from an unanticipated decrease in inflation because the real value of the money they are repaid increases compared to what was expected at the time the loan was issued. This means they receive more in terms of purchasing power than anticipated.

In What Circumstances Would Lenders Most Beneﬁt