Q:
Who benefits from unexpected inflation?
A:
Quick Answer
Borrowers benefit from unexpected inflation. Lenders, on the other hand, are hurt by unexpected inflation. Because of its destabilizing effects on the economy, unexpected inflation is of considerable concern to economic policymakers.
Continue Reading
Credit:
Ivan Bliznetsov
E+
Getty Images
Full Answer
According to Investopedia, inflation is the rate of increase in the general level of prices. As the price level increases, purchasing power is decreased. Thus, borrowers benefit by repaying debts with money that is worth less. When lenders are uncertain about future inflation, they charge borrowers higher interest to compensate for the loss of purchasing power caused by inflation. A primary function of the Federal Reserve Bank is to control the United States money supply with the goal of keeping prices stable.
Learn more about Marketing & SalesSources:
Related Questions
-
Q:
Who is least likely to be hurt by unanticipated inflation?
A: Financial institutions and individuals with large amounts of money are the ones least likely to be affected by unanticipated inflation. While their resourc... Full Answer >Filed Under: -
Q:
Where can you find free samples of marketing plans?
A: Mplans.com and MoreBusiness.com offer free marketing plan samples and templates. View marketing plans for a specific position and break down the plan into ... Full Answer >Filed Under: -
Q:
How can you find information about the Stafford Springs Swap Meet?
A: Information about the Stafford Springs Swap Meet is available from the Stafford Motor Speedway, the Connecticut Motor Cycle Riders Association and EventCra... Full Answer >Filed Under: -
Q:
What is a UPC code?
A: A universal product code is a specific kind of barcode used to keep track of store items. The code is used throughout the world, though the format can vary... Full Answer >Filed Under:
