Given a Fixed Nominal Interest Rate on a Loan, Unanticipated

question 35

Multiple Choice

Given a fixed nominal interest rate on a loan, unanticipated inflation:

• A)decreases the burden of paying off the loan.
• B)increases the burden of paying off the loan.
• C)does not alter the burden of paying off the loan.
• D)benefits savers.

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Definitions:

Uncertainty Avoidance

A cultural dimension that describes the degree to which people in a society attempt to cope with anxiety by minimizing uncertainty.

The United Kingdom

A sovereign country located off the northwestern coast of mainland Europe, comprising England, Scotland, Wales, and Northern Ireland.

Gender Egalitarianism

The belief in and practice of equal rights, responsibilities, and opportunities for individuals of all genders.

Equal Treatment

The principle of providing the same level of respect, opportunities, and fairness to all individuals, regardless of differences.