Inflation Benefits Debtors Most

Steps:

• High inflation erodes the purchasing power of money over time.
• Fixed-income earners receive unchanging nominal payments, so their real income falls.
• Exporters face higher domestic costs, reducing competitiveness unless currency depreciates proportionally.
• Debtors repay loans with inflated currency, lowering the real value of their debt burden.

Why D is correct:

• Debtors benefit because inflation reduces the real value of fixed nominal debt, as per the Fisher effect where nominal interest rates lag behind unexpected inflation.

Why the others are wrong:

• A incorrectly states fixed-income earners benefit, but their real income declines.
• B wrongly claims no groups benefit, ignoring debtors' gains.
• C duplicates D but is listed separately; assuming distinction, it misaligns with full analysis.

Final answer: D