"Variable inflation hurts both debtors and creditors because:

a. inflation makes the money-fixed assets of creditors worth less.
b. inflation makes the money-fixed liabilities of debtors worth less.
c. most debtors and creditors are risk averse.
d. most debtors and creditors are risk neutral"

C). Most debtors and creditors are risk averse.

Explanation:

Inflation is described as the condition in the economy in which prices of goods and services tend to increase which reduces the purchasing power of the people.

As per the question, the variable inflation affects both the debtors as well as creditors as 'most of them(debtors and creditors) are risk-averse.' However, the debtors can gain by repaying a similar amount but with a less purchasing power during such time but they fear to take such risks due to the constant variance while the creditors also possess the similar risk aversiveness due to fluctuations in the increase of prices. Therefore, option C is the correct answer.

this is an outline for the decisions that frankie is going to make

opportunity cost

willingness to buy

price or quality

of course, there could be many economic strategies that should be considered important while making decision. opportunity cost is the foremost significant factor while considering any economic option. when you buy something, you should know how much you are forgoing for this product. indeed, you could buy something different with this measure if you changed your mind. willingness to buy shows how much surplus you are earning while making a decision. it is important because it shows you buy what you want or you buy because you have only limited amount of money. the price or quality can be considered as a general economic option that we are applying while buying something. when you buy something, price or quality could be one of the options. indeed, they define the characteristics of the product.    

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