This type of high and unexpected inflation will reduce the purchasing power of money saved by savers. Hence, it will have a negative impact on savers.
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High and unexpected inflation
The creditors gain when the value of the money lent to borrowers rises.
Firms are unable to offset these costs in the short run due to all these costs. Firms are unable to offset these costs in the short run due to all these costs similar to what happened in the inflation of the 1970s.
Real interest rates after taxes are what savers prefer.
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