If the expected inflation rate was 7 percent and the actual inflation rate was 3 percent, then
A) borrowers gained in real terms at the expense of lenders.
B) lenders gained in real terms at the expense of borrowers.
C) borrowers and lenders were not affected.
D) the government gained because it collected more in taxes.
Correct Answer:
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Q1: If the ex-post real interest rate is
Q2: What is the real present value of
Q4: Suppose you bought an inflation-indexed security for
Q5: Another name for the expected real interest
Q6: For every dollar's worth of goods and
Q7: The nominal interest rate adjusted for actual
Q8: For every dollar's worth of goods and
Q9: If the expected inflation rate is 4
Q10: If the expected inflation rate is 3
Q11: The real interest rate is the nominal
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