If the Expected Inflation Rate Was 4 Percent and the Actual

question 33

Multiple Choice

If the expected inflation rate was 4 percent and the actual inflation rate was 6 percent, then

• A)borrowers gained in real terms at the expense of lenders.
• B)lenders gained in real terms at the expense of borrowers.
• C)borrowers and lenders were not affected.
• D)the government lost because it collected less in taxes.

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