Final answer:
Inflation causes debt to be worth less, benefiting debtors but negatively impacting creditors.
Explanation:
Inflation causes debt to be worth less because the purchasing power of money decreases. Debtors benefit from inflation as they can repay loans in dollars that are now worth less than originally expected. Creditors, on the other hand, are negatively impacted by inflation as the money they receive can purchase less compared to before.
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