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Home Q & A Board Other Fields Homework Help Business Economics
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melinoma86 melinoma86
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5 years ago

Dean borrows $400 from Tim. Tim wants to make a 10% real return on his money, so they both agree on a 10% interest rate paid next year. Dean and Tim did not anticipate any inflation, yet the actual inflation turned out to be 4% next year. In this case



▸ Tim is better off.

▸ Dean will pay $56 a year from now on.

▸ Dean is better off.

▸ Tim will receive more than 10% of real rate of return a year from now.
Textbook 
Principles of Economics

Principles of Economics


Edition: 12th
Authors:
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Jacobian S.Jacobian S.
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5 years ago
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melinoma86 Author
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5 years ago
Helps a lot... Now I'm ready for my quiz
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