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14 June, 08:55

Unanticipated inflation benefits debtors at the expense of creditors.

a. True

b. False

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Answers (1)
  1. 14 June, 11:06
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    Ans : Unanticipated inflation benefits debtors at the expense of creditors. The statement is True. When the inflation is unexpectedly high, the Real Interest Rate is lower than anticipated thats why it hurts lenders but benefits borrowers.
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