Which of the following groups suffer the most from inflation?
- ADebtors
- BCreditors
- CBusiness class
- DHolders of real assets
Solution & Step-by-step Explanation
During periods of high inflation, the purchasing power of money falls. Creditors suffer because the real value of the money they lent decreases by the time they get repaid. Conversely, debtors benefit because they repay their debts with lower-valued currency, while business owners and physical asset holders often see their nominal returns or values rise.