Final answer:
The correct answer is option D. During rapid inflation, lenders (creditors) are most adversely affected as they are repaid with money that has less purchasing power. Low-income households also suffer due to stagnant wages, and households with significant financial wealth may experience negative real returns on investments.
Step-by-step explanation:
In periods of rapid inflation, those who suffer include low-income households, households with substantial financial wealth, and especially lenders (creditors). Low-income households tend to lose out because they may not see a proportional increase in wages to match the rising cost of living caused by inflation.
Households with substantial financial wealth are affected when their investments do not yield returns that keep up with the pace of inflation, eroding the real value of their assets. However, the most affected are often the lenders (creditors). This is due to the fact that during inflation, the real value of the money that the borrower repays is less than what was originally lent, considering the decrease in purchasing power. Conversely, inflation can benefit borrowers (debtors) as they get to repay their loans with money that is worth less than when they borrowed it.
The correct option that identifies the group that tends to lose out in periods of rapid inflation is D. Lenders (creditors).