Suppose that you lend $1,000 to a friend who pays you back $1,100 the next year.Suppose that prices that year rose by 8% and the real rate of return in the stock market was 4%.Your friend says that he or she was being more than fair by giving you more than the rate of inflation as a return.What do you think?

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The Answer of Suppose that you lend $1,000 to a friend who pays you back $1,100 the next year.Suppose that prices that year rose by 8% and the real rate of return in the stock market was 4%.Your friend says that he or she was being more than fair by giving you more than the rate of inflation as a return.What do you think?

Suppose That You Lend $1,000 to a Friend Who Pays