Which of the following groups are typically harmed by unexpected inflation?
A)lenders
B)borrowers
C)pensioners on fixed incomes
D)both (a) and (c).

Question

Which of the following groups are typically harmed by unexpected inflation?
A)​lenders
B)​borrowers
C)​pensioners on fixed incomes
D)​both (a) and (c).

Quizplus · Accepted Answer

Lenders are typically harmed by unexpected inflation because the money they will receive in repayment will be worth less than the money they originally lent out. Pensioners on fixed incomes are also typically harmed by unexpected inflation because their income remains the same, but the cost of goods and services increases, reducing their purchasing power. Borrowers, on the other hand, benefit from unexpected inflation because they are paying back loans with dollars that are worth less than the dollars they originally borrowed.

Which of the Following Groups Are Typically Harmed by Unexpected