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    Exam 8: Economic Fluctuations, Unemployment, and Inflation
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    If Borrowers and Lenders Expect a Higher Rate of Inflation
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If Borrowers and Lenders Expect a Higher Rate of Inflation

Question 23

Question 23

Multiple Choice

If borrowers and lenders expect a higher rate of inflation,


A) nominal interest rates will tend to fall.
B) real interest rates will tend to fall.
C) nominal interest rates will tend to rise.
D) real interest rates will tend to rise.

Correct Answer:

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