Suppose that Lisa lends Alex $1,000, which Alex must repay after one year with an interest payment of 10 percent. When Lisa lends money to Alex, she expects that the inflation rate over the year will be 3 percent. However, after she lends the money, the actual inflation rate for the year turns out to be 5 percent. In this scenario, who gains from the higher than expected inflation rate? Justify your answer.

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The Answer of Suppose that Lisa lends Alex $1,000, which Alex must repay after one year with an interest payment of 10 percent. When Lisa lends money to Alex, she expects that the inflation rate over the year will be 3 percent. However, after she lends the money, the actual inflation rate for the year turns out to be 5 percent. In this scenario, who gains from the higher than expected inflation rate? Justify your answer.

Suppose That Lisa Lends Alex $1,000, Which Alex Must Repay