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Home Q & A Board Other Fields Homework Help Business Economics
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Tidy Tidy
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Posts: 4852
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9 years ago
Suppose that at the beginning of a loan contract, the real interest rate is 4% and expected inflation is currently 6%. If actual inflation turns out to be 7% over the loan contract period, then
A) borrowers gain 1% of the loan value.
B) lenders gain 1% of the loan value.
C) borrowers lose 3% of the loan value.
D) lenders gain 3% of the loan value.
Textbook 
Essentials of Economics

Essentials of Economics


Edition: 4th
Authors:
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Repeat after me: 'Calm down. Things are gonna be fine. Things are gonna be all great. Just relax.' Wink Face
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Chimelo46Chimelo46
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9 years ago
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#2
8 years ago
The textbook reference in your signature really helped me narrow it down.

Happy to help Wink Face
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