If You Are a Borrower, Which Would You Prefer to Occur

question 60

Multiple Choice

If you are a borrower, which would you prefer to occur during the life of your loan?

• A) a level of inflation that is higher than that anticipated at the outset of the loan
• B) a level of inflation that is lower than that anticipated at the outset of the loan
• C) a level of inflation that is exactly as anticipated at the outset of the loan
• D) no inflation at all

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Definitions:

Economic Role

The functions and responsibilities that different entities (individuals, firms, governments) play in the economy.

Government

The governing body of a nation, state, or community which makes and enforces laws, policies, and regulations.

Interest Payments

The amount paid by a borrower to a lender as a charge for the use of borrowed money, typically expressed as an annual percentage of the principal.

National Debt

The total amount of money that a country's government has borrowed, typically as a result of budget deficits, and is yet to repay.