Final answer:
If the rate of inflation is lower than the interest rate on a deposit, the depositor experiences an increase in purchasing power. A positive real interest rate means the depositor can buy more goods and services over time. Unexpected rises in inflation can benefit borrowers while harming lenders, as repayment occurs with devalued money.
Step-by-step explanation:
When the rate of inflation is less than the interest rate on Dalia's deposit, her purchasing power over the deposit increases over the course of the year. This is because the real interest rate (interest rate minus inflation rate) is positive. As an example, if Dalia receives a 5% interest rate on her deposit and inflation is at 2%, the real interest rate would be 3%. The extra interest compensates for the rise in prices due to inflation and leaves additional value on top. Therefore, Dalia's deposit will be able to buy more goods and services at the end of the year than it could at the beginning, assuming she earned the interest and did not spend any principal.
However, if inflation were to increase unexpectedly while the interest rate remains fixed, this can lead to a redistribution of financial benefits. In essence, borrowers or demanders of financial capital might benefit, as they repay loans with money that is worth less, while lenders or suppliers of financial capital would potentially suffer, receiving payment in dollars with decreased purchasing power.