Which of the following individuals benefits from inflation?

A) Ben, who borrowed $1,000 from a friend and agreed to pay the same amount one year laterB) Randall, who lives on a fixed income of $800 per monthC) Asuza, who keeps her savings in the form of cash in a safe at homeD) Mark, who lent his friend $1,000 and agreed to accept repayment of the same amount one year later

Question

Chyna

Business

25 February, 10:44

Which of the following individuals benefits from inflation?

A) Ben, who borrowed $1,000 from a friend and agreed to pay the same amount one year laterB) Randall, who lives on a fixed income of $800 per monthC) Asuza, who keeps her savings in the form of cash in a safe at homeD) Mark, who lent his friend $1,000 and agreed to accept repayment of the same amount one year later

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Answers (1)

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Tyler Hammond · Answer 1

Ben, who borrowed $1,000 from a friend and agreed to pay the same amount one year later.

Answer: Option A.

Explanation:

Inflation is defined as the persistent increase in the prices of the goods and the services in the economy. With the inflation on the rise, the people in the economy have to face difficulties to meet their needs and wants if their incomes remain the same but the prices of the goods and the service are on a rise.

In the case discussed above, since Ben had to return exactly the same amount that he had borrowed a year before, inflation turned out to be advantageous for him.