Suppose That Anticipated Inflation Is 4% for the Coming Year,with

Multiple Choice

Suppose that anticipated inflation is 4% for the coming year,with loan contracts set at 7% in the expectation of a 3% return after inflation.If the actual inflation rate at the end of the year is 2%:

A) creditors gain at debtors' expense.
B) people on a fixed income see the purchasing power of their incomes rising.
C) debtors gain at creditors' expense.
D) there's a redistribution of income from creditors to debtors.