Question

High and unexpected inflation has a greater cost Select one: a. for those who borrow than for those who save. b. for those who hold a little money than for those who hold a lot of money. c. for those who have fixed nominal wages than for those who have nominal wages that adjust with inflation. d. All of the above are correct.

Answer 1

c. for those who have fixed nominal wages than for those who have nominal wages that adjust with inflation.

Step-by-step explanation:

Inflation is the general increase in the price of goods and services in a country. This means that it would take more dollars to buy the same amount of goods you are purchasing today in the future. Inflation causes the consumers' purchasing power to decrease. However, those who have fixed wages will suffer most since their income would not increase but the amount they would pay for goods and services would increase. Those whose income increase with increase in inflation rate will feel minimal effect.