If Future Price Changes Were Perfectly Anticipated by Both Borrowers

question 91

Multiple Choice

If future price changes were perfectly anticipated by both borrowers and lenders,then _____.

• A)the expected real interest rate would be higher than the actual rate
• B)the expected real interest rate would lower than the actual rate
• C)the real interest rate in the future would decrease by the amount of the price increase
• D)the real interest rate in the future would increase by the amount of the price increase
• E)the real interest rate in the future would remain unchanged

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