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If Inflation Were Always Perfectly Anticipated and Contracts Were Written

Question 12

Multiple Choice

If inflation were always perfectly anticipated and contracts were written in real terms, then


A) there would only be a transfer of wealth from debtors to creditors
B) there would only be a transfer of wealth from creditors to debtors
C) there would only be a transfer of wealth from the poor to the rich
D) there would only be a transfer of wealth from households to firms
E) currency holders would have a negative rate of return

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