Assume That There Is a Fixed Rate of Interest on Contracts

question 188

Multiple Choice

Assume that there is a fixed rate of interest on contracts for borrowers and lenders.If unanticipated inflation occurs in the economy, then

• A)both lenders and borrowers benefit.
• B)both lenders and borrowers are hurt.
• C)borrowers are hurt, but lenders benefit.
• D)lenders are hurt, but borrowers benefit.

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