Why are creditors harmed by unexpected inflation?
a. Creditors receive lower nominal rates of interest when prices rise.
b. Creditors are paid back with more valuable dollars.
c. Creditors receive higher nominal rates of interest when prices rise.
d. Creditors are paid back money with less spending power than they expected when the money was loaned out.
Question 2
During an inflationary period, those most likely to suffer reduced wealth are those who are holding their wealth in:
a. gold.
b. real estate.
c. currency.
d. stocks.
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