Multiple Choice
If a borrower and lender agree to an interest rate on a loan when inflation is expected to be 7 percent and inflation turns out to be 10 percent over the life of the loan, then the borrower ________ and the lender ________.
A) gains; gains
B) gains; loses
C) is not affected; gains
D) loses; gains
Correct Answer:
Verified
Correct Answer:
Verified
Q88: For a given nominal interest rate, an
Q89: The extra costs incurred to avoid holding
Q90: A college graduate in 1972 found a
Q91: If the nominal interest rate is 8 percent
Q92: Inflation reduces economic efficiency because it does
Q94: The annual percentage rate of change in
Q95: The CPI equals 1.00 in year one
Q96: A labor contract provides for a first-year
Q97: As the rate of inflation increases, the
Q98: A real quantity is a quantity measured:<br>A)in