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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Definitions:

Pie Chart

A pie chart is a graphic display in the form of a circle divided into pie-shaped sectors that are used to present data in percentages.

Envelope Accounting

A budget management strategy where money is divided into envelopes for different spending categories, helping to control expenses.

Cash Flow

The money that goes in and out of a budget within a fixed period of time.

Budget Plan

A detailed outline of expected income and expenses over a given period, helping individuals or organizations manage their finances.