Which of the following is most likely to be of benefit to a debtor?

A. inflation
B. deflation
C. revaluation
D. monetization

Correct Answer: Option A

A. inflation

Explanation

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.

If wages increase with inflation, and if the borrower already owed money before the inflation occurred, the inflation benefits the borrower. This is because the borrower still owes the same amount of money, but now he or she has more money in his or her paycheck to pay off the debt.