If both the lender and borrower agree on an 8% interest rate, both expect a 4% inflation rate, and inflation turns out to be 4%, then ______ by the inflation.
A)the borrower is hurt and the lender gains
B)the borrower gains and the lender is hurt
C)neither the borrower nor the lender are hurt
D)both the borrower and lender are hurt

Question

Quizplus · Accepted Answer

The expected inflation rate was 4%, and the actual inflation rate was also 4%. Therefore, both the borrower and lender's expectations were met, and neither is hurt by the inflation.

If Both the Lender and Borrower Agree on an 8