Assume that because of increased uncertainty regarding


Question: Assume that because of increased uncertainty regarding future inflation, debt instruments either provide for a relatively short maturity, or for variable interest tied to prevailing market rates. In choosing between these two alternatives, what are the trade-offs for a borrower and for a lender? What, if any, are the potential costs to the overall economy if traditional markets for long-term debt cease to exist?

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Finance Basics: Assume that because of increased uncertainty regarding
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