f borrowers and lenders expect 2% inflation for the next 5 years, and they make lending arrangements based upon those expectations, but the actual inflation rate turns out to be 8%, then A) borrowers gain and lenders lose. B) borrowers gain and lenders gain. C) borrowers lose and lenders lose. D) borrowers lose and lenders gain.
f borrowers and lenders expect 2% inflation for the next 5 years, and they make lending arrangements based upon those expectations, but the actual inflation rate turns out to be 8%, then A) borrowers gain and lenders lose. B) borrowers gain and lenders gain. C) borrowers lose and lenders lose. D) borrowers lose and lenders gain.
Chapter17: Inflation
Section: Chapter Questions
Problem 20SQ
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Answer it correctly please.Explain your answer. I will rate accordingly. My last attempt, Do it fast and explain.
If borrowers and lenders expect 2% inflation for the next 5 years, and they make lending arrangements based upon those expectations, but the actual inflation rate turns out to be 8%, then
A) borrowers gain and lenders lose.
B) borrowers gain and lenders gain.
C) borrowers lose and lenders lose.
D) borrowers lose and lenders gain.
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