Inflation in the economy results in _______.

Benefitting to the debtors.

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Rise in consumption.

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Benefitting to savers.

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Appreciation of exchange rate.

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Solution

The correct option is B Benefitting to the debtors.
Inflation refers to a rise in general level of prices/sustained rise in the general level of prices/persistent increase in the general level of prices. Inflation reduces the value of money. Hence, it redistributes wealth from creditors (those who lend money) to debtors (those who borrow money).

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