Concept:Inflation reduces the real value of money owed, so borrowers repay debt with money that is worth less.
Explanation:A debtor borrows a fixed amount of money at a point in time.
When inflation occurs, the general price level rises and the purchasing power of money falls.
The debtor still repays the same nominal amount, but that amount is now worth less in real terms.
This reduces the real burden of the existing debt, which benefits the debtor.
If wages also increase with inflation, the debtor may find it easier to repay the loan.
Deflation, revaluation, and monetization do not generally reduce the real value of an existing debt.
Answer:A. Inflation