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GCE Economics 1989 Question 22

Question 22

Money and Inflation

Which of the following categories of people do not gain during inflation?

  1. A.Debtors
  2. B.Businessmen
  3. C.Shareholders
  4. D.Investors
  5. E.Creditors.
Show the answer and explanation

Answer: E (Creditors.)

Explanation

Creditors are repaid in money that buys less than when they lent it, so they lose during inflation.