Benefit of Inflation for Debtors
Question:
Which of the following people is likely to benefit from inflation?
A. A retired person on a fixed income
B. A person who has a large savings account
C. A person who owes $200,000 on a loan
D. A person with low income
Answer:
C. A person who owes $200,000 on a loan
Description:
Inflation can benefit individuals who have significant debt because it erodes the real value of money over time. When inflation rises, the nominal value of the debt remains the same, but the real value of the amount owed decreases. This means that the burden of repaying the debt becomes less in real terms, as the money used to repay the loan is worth less than it was when the debt was incurred.
- Powers of the Governor in Indian States Executive, Legislative
- Latitude of India's Northern Extremity Key Geographic Details
- Sher Shah's Administrative Reforms Influence Muhammad Tughluq
- Understanding the System of Checks and Balances in India
- Impact of Universal Adult Franchise Empowering Citizens
- Foundational Challenge Federalism Overcoming Non-Democratic
- Understanding Indian Secularism and Its Importance Key Reasons
- Cultural and Educational Rights in the Indian Constitution Articles
- Why Dalit Children Face Discrimination in Schools
- Correct Answer Conservatives vs Radicals on Chan
- Foundational Challenge to Federalism Non-Democratic Regimes
- Reasons for Division and Backwardness in Indian Society
- Why the 1857 Revolt is Called the First War of Independence
- Appendicular Skeleton and Muscle System
- Why Education Was Put Under State Control After Independence
AssignmentHelpAid
0
