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You Borrow Money to Buy a House in 2012 at a Variable

question 31

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You borrow money to buy a house in 2012 at a variable interest rate of 6.5%.Your interest rate is always 2% more than the rate of inflation.By 2016,the inflation rate has risen to 8.5%.Considering only your mortgage,is inflation good news or bad news for you?


Definitions:

Post-Decision Dissonance

A form of regret or psychological discomfort experienced after making a challenging decision.

Attitude-Behavior Consistency

The degree to which a person's attitudes (feelings and beliefs) are reflected in their behaviors or actions.

Behavioral Intention

The motivational factors that predict an individual’s planned actions or behaviors, influenced by attitudes and perceptions.

Increases

The action of becoming or making something larger or more in quantity, size, or degree.

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