You would rather be a borrower when _____
A) expected inflation is high and interest rate are high.
B) expected inflation is high and interest rate are low.
C) expected inflation is low and interest rate are high.
D) expected inflation is low and interest rate are low.
E) expected inflation is zero.

Question

Quizplus · Accepted Answer

When expected inflation is high and interest rates are low, the real value of the money you repay in the future is less than the value of the money borrowed today, making it advantageous to be a borrower.

You Would Rather Be a Borrower When _____