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T/F: Unanticipated inflation can benefit lenders and harm borrowers.
Why?
Why?
False - Unanticipated deflation harms borrowers and benefits lenders.
This is because borrowers did not predict the deflation, so suddenly they have to pay back more money than they originally thought they would have to (b/c the interest and principle on the loan is now worth more).
This is because borrowers did not predict the deflation, so suddenly they have to pay back more money than they originally thought they would have to (b/c the interest and principle on the loan is now worth more).
Karteninfo:
Autor: savhighsmith
Oberthema: Economics
Thema: History of Economics
Schule / Uni: UGA
Ort: Athens
Veröffentlicht: 12.10.2010