If Inflation Increases Unexpectedly,then

question 59

Multiple Choice

If inflation increases unexpectedly,then

• A)borrowers pay a higher real interest rate than they expected.
• B)lenders receive a lower real interest rate than they expected.
• C)lenders gain and borrowers gain.
• D)neither borrowers nor lenders lose.

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Definitions:

Sharp Piece

A fragment or object with a pointed or edged part capable of cutting or puncturing.

Gasoline

A flammable liquid derived from petroleum, used primarily as fuel in internal combustion engines.

Space Heaters

Portable devices used to heat a specific area or room, providing warmth using electrical or another fuel source.

Thermal

Relating to heat or temperature, often used in contexts involving the transfer or generation of heat.