231k views
2 votes
Which of the following is true regarding unanticipated inflation?

Workers are hurt by unanticipated inflation (if wage rates are fixed.)
Employers are hurt by unanticipated inflation (if wage rates are fixed.)
Lenders are hurt by unanticipated inflation.
Borrowers are hurt by unanticipated inflation.

III only
I and III only
I and IV only
II and III only
II and IV only

User Barry Chum
by
5.3k points

1 Answer

4 votes
The answer would be I and III only.

Unanticipated inflation happens when people only find out about an increase in price of goods and services, only when it has already increased.

Workers are hurt by this, especially when wage rates are fixed because their expenses for daily living will increase and the income they make might not be enough to accommodate the increase.

Lenders are affected because the money they lent will not have the same purchasing power than it originally had when they lent it.
User Waraker
by
5.2k points