Assume that for a given year, the nominal interest rate is 9 percent while inflation rises to 11 percent indicating a 4 percent higher rate than anticipated. Which group of people is made better off by the inflation?
a. Those who lend at fixed interest rates
b. Those who borrow at fixed interest rates
c. Those who borrow at variable interest rates
d. Those who receive fixed incomes
e. Those who save at variable interest rates
Question 2
Scarcity exists for those with
a. lower incomes.
b. average incomes.
c. higher incomes.
d. all of the above.
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