Purchase Solution

Debt during periods of high inflation

Not what you're looking for?

Ask Custom Question

Explain why debtors benefit during periods of high inflation.

For example, why would someone in Argentina want to have debt? Why does money have a time value?

Purchase this Solution
Solution Summary

The expert explains why debtors benefit during periods of high inflation.

Solution Preview

Present worth of rupee received after some time will be less than the rupee received today. This is because of time value of money. The investor has time preference of money because he has reinvestment opportunities for funds, which are received early.

The present value of a future cash flow is the nominal ...

Purchase this Solution
Free BrainMass Quizzes
Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

View More Free Quizzes
Related BrainMass Solutions

  • Inflation and Present value

    121532 Explain why debtors benefit during periods of high inflation. How is the present value of a lump sum related to the present value of a stream of payments? Question 1. Explain why debtors benefit during periods of high inflation.

  • Managerial Finance - Time Value and Money

    Could you explain why debtors benefit during periods of high inflation. Why would someone in Argentina want to have debt and why does money have a time value? 2.

  • Help with Multiple choice questions

    C) contractionary monetary policy during boom periods and expansionary monetary policy during recession. D) contractionary monetary policy during recession and expansionary monetary policy during boom periods. 24.

  • effects of the changes in fiscal policy

    This will increase the size of the deficit and also maintain aggregate demand during recessionary periods. Corporate profit taxes: During expansions corporate profit taxes are automatically high, producing government surpluses.

  • Impact of Recession: Interest Rates

    Note that on the contrary, high interest rates basically curb inflation, but also slow down the economy since the general cost of living becomes expensive.

  • Multiple choice/ short answer questions on Monetary Policy

    c. contractionary monetary policy during boom periods and expansionary monetary policy during recession. d. contractionary monetary policy during recession and expansionary monetary policy during boom periods. 13.

  • Bureau of Economic Analysis

    Look at the inflation adjusted data and identify the periods of negative real economic growth. What might have caused each of these periods of economic decline?

  • Effects of Unanticipated Inflation

    f- We can assume that because of inflation, the store owner will raise his/her prices, just as everyone else has in the retail industry during periods of inflation.

  • relationship between the inflation and the unemployment

    So the reason employment rises during high inflation periods is that real wages decrease and firms hire more labor.

View More Related Solutions