Multiple Choice
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 when it was originally loaned out.
Correct Answer:
Verified
Correct Answer:
Verified
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