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 than if it is not anticipated.
C)Accurate anticipation of inflation is possible for everyone who is well informed about economic events.
D)Those who have borrowed money at an interest rate below the rate of inflation will generally benefit.
E)If people anticipate inflation,their actions will prevent the inflation.

Question

Quizplus · Accepted Answer

If inflation occurs, the value of money decreases. Therefore, those who have borrowed money at an interest rate below the rate of inflation will benefit because they will pay back their loans with money that is worth less than the money they borrowed.

Which of the Following Is True About Inflation