No one really, relatively speaking only those who have hard cash or cash in the safest instruments like government securities and after that people who would have money in some cash equivalent hard commodity like gold etc. Traditionally savers lose from inflation. Unexpected inflation harms lenders and those holding monetary assets. Inflation allows borrowers to pay lenders back with money that is worth less than it was when it was originally borrowed, which benefits borrowers. Such a “PREDICTED INFLATION”does not cause enough harm to the people since you can handle it by proper planning. An unexpected rise in inflation ought to be the thing investors are most determined to guard against. Unexpected inflation may occur when the currently held macroeconomic model does not adequately account for new circumstances. Winners-benefited (benefited-winners or harmed-losers by unexpected inflation) Herb, who keeps his savings in an old coffee can. When the actual rate of inflation turns out to be less than the expected rate, your money holds onto more of its buying power. According to Investopedia, inflation is the rate of increase in the general level of prices. Answers (2) Lorette 2 May, 10:56. Both components have different costs. When unexpected inflation occurs, some people in society are harmed while other people are made better off. 7. The total labor force consists of: the number of employed persons plus the number of unemployed persons. When unexpected inflation occurs, the value of debts decreases and the amount... See full answer below. Unexpected inflation always redistributes wealth from people who have contracted to receive fixed nominal amounts in the future to the people who have contracted to pay those fixed nominal amounts. During inflation, nominal interest rates rise. Who is harmed the MOST during periods of unexpected inflation? Asked by Wiki User. Services, Unanticipated Inflation: Definition & Overview, Working Scholars® Bringing Tuition-Free College to the Community. Karen, a retired school teacher that relies upon her fixed pension to pay for her expenses. Means the dollar is worth less, so the purchasing power of their real income falls Why are savers hurt by unexpected inflation? Unexpected inflation harms lenders and those holding monetary assets. Now it's true that an unexpected increase in the inflation rate can unfairly hurt savers, since the inflation might not be factored into interest they receive. Your savings from your summer job are in a savings account paying a fixed rate of interest. Comment; Complaint; Link; Yseult 2 May, 11:03. If the real interest rate falls, the family will be helped. Monetary inflation may or may not cause price inflation. 4. Herb, who keeps his savings in an old coffee can. Inflation results in the value of each unit of currency dropping in purchasing power to reflect the underlying economic reality. Creditors aren't harmed by unexpected inflation. Joy, who has borrowed 40,000 to pay for her education. It, Say that initially the nominal interest rate is 6% and prices are stable, but the inflation rate the, following year rises to 3%. When inflation … A) 1 B) 1 and 3 C) 1, 2, and 3 D) 2 and 4 - 13847221 As the price level increases, purchasing power is decreased. Answer. Wiki User Answered . Which of the following groups are typically harmed by unexpected inflation a, 225 out of 244 people found this document helpful. Unexpected Inflation A situation in which the inflation rate is higher than economists, regulators or others anticipated. We can simply understand this phenomenon by its title “ANTICIPATED” , which means Predicted or “KNOWN”. 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