Suppose That at the Beginning of a Loan Contract, the Real

question 181

Multiple Choice

Suppose that at the beginning of a loan contract, the real interest rate is 4% and expected inflation is currently 6%.If actual inflation turns out to be 7% over the loan contract period, then

• A)borrowers gain 1% of the loan value.
• B)lenders gain 1% of the loan value.
• C)borrowers lose 3% of the loan value.
• D)lenders gain 3% of the loan value.
• E)lenders gain 2% of the loan value.

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Definitions:

Stimulus Generalization

A learning process in which a response to one stimulus becomes associated with other similar stimuli, leading to a similar response.

Classical Conditioning

A learning process in which a biologically potent stimulus is paired with a previously neutral stimulus to elicit a conditioned response.

Conditioned Response

A learned reaction to a specific stimulus that results from repeated exposure to that stimulus paired with a particular response.

Classical Conditioning

A learning paradigm wherein two stimuli are continuously paired together; initially, the response comes from the second stimulus, but later, the first stimulus can independently provoke the response.