Effects of unanticipated inflation impacts different people in different ways Consider the following...........

Economic Affairs Inflation

Effects of unanticipated inflation impacts different people in different ways. Consider the following statements in this context:

1. Debtors typically benefit from inflation

2. Inflation typically creates expectations among people of increasing prices, which may contribute to future inflation.

3. Savers generally lose money because of inflation

Choose the correct codes:

1 Only

1 and 2

1 and 3

All of above

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Explanation:

Exp:- inflation is a sustained increase in the general price level of goods and services in an economy over a period of time resulting in a loss of value of currency.

Exp:- inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy,measure of price inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index,