Question

Whom does inflation hurt the most?

Question 1 options:

consumers


debtors


producers


creditors

Answer 1

The correct answer is D) Creditors

Step-by-step explanation:

Inflation is the rise in the prices of goods and services. It is actually the depreciation in the value of money. Suppose if at one point of inflation, a product is purchased at $5, then if the inflation rises then the same product will now be purchased in say $6. This is how inflation affects the value of money.

The creditors who gave loans to others will be most affected by the increase in inflation, because they will receive the same amount of money back but with the decreased value of the money. Suppose, they gave $5000 loan to someone, and with the increase in inflation the value of money will decrease but they will still get the credited amount, which will be a loss for them.

Answer 2

consumers

Step-by-step explanation:

Inflation is the losing buying power of money through time. If a consumer is paying 5∈ for a milk carton in 2019 with an inflation of 3% for 2020 the same milk carton will cost 5∈ and 15 cents. At the end inflation of prices is always paid by consumers