Which of the following is true about inflation?
A) Inflation promotes social harmony by uniting people against the government.
B) Inflation is more damaging if it is anticipated.
C) Accurate anticipation of inflation is possible for everyone who is well informed about economic events.
D) Those who lend money at a rate below the rate of inflation suffer economic losses.

Question

Quizplus · Accepted Answer

Those who lend money at a rate below the rate of inflation suffer economic losses as the value of the money they receive back is worth less than the value of the money they lent. The other choices are incorrect. Inflation creates economic instability and can lead to social unrest, accurate anticipation of inflation is difficult, and not everyone is well informed about economic events.

Which of the Following Is True About Inflation