Which of the following agents would benefit from unanticipated inflation?
Choose 1 answer:
(A) Olenna, who has stashed away money in a cave
(B) Bran, whose nominal income is the same every month
(c) The soldiers of Westeros, who are paid wages based on the salary negotiated last year
(D) Ygritte, who loaned Robb money last year at $3 \%$
(E) Grey Worm, who has $\$ 3,000$ in student loan debt that has a fixed interest rate of $3.5 \%$

Question

Which of the following agents would benefit from unanticipated inflation?
Choose 1 answer:
(A) Olenna, who has stashed away money in a cave
(B) Bran, whose nominal income is the same every month
(c) The soldiers of Westeros, who are paid wages based on the salary negotiated last year
(D) Ygritte, who loaned Robb money last year at $3 \%$
(E) Grey Worm, who has $\$ 3,000$ in student loan debt that has a fixed interest rate of $3.5 \%$

Accepted Answer

***E*** ∻Key Concept∻ ⚹Real Interest Rate and Inflation⚹ ∻Explanation∻ ⚹Unanticipated inflation benefits debtors as it reduces the real value of the money they owe. Grey Worm, with a fixed interest rate loan, repays with money that is worth less than when he borrowed it.⚹◊How does unanticipated inflation impact the real value of debt for borrowers like Ygritte who loaned money at a fixed interest rate?⍭ Generate me a similar question◊

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