If Both the Lender and Borrower Agree on an 8

Multiple Choice

If both the lender and borrower agree on an 8 percent interest rate, both expect a 4 percent inflation rate, and inflation turns out to be 4 percent, then ________ by the inflation.

A) the borrower is hurt and the lender gains
B) the borrower gains and the lender is hurt
C) neither the borrower nor the lender are hurt
D) both the borrower and lender are hurt