When Inflation Rises Unexpectedly

Multiple Choice

When inflation rises unexpectedly:

A) the real interest rate will exceed the equilibrium rate,which will benefit lenders and harm borrowers.
B) the real interest rate will exceed the equilibrium rate,which will benefit borrowers and harm lenders.
C) the real interest rate will fall short of the equilibrium rate,which will benefit lenders and harm borrowers.
D) the real interest rate will fall short of the equilibrium rate,which will benefit borrowers and harm lenders.