Is the real interest rate on loan higher-lower than expected, Microeconomics

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Is the real interest rate on loan higher-lower than expected

Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Then inflation turns out to be higher than they both expected.

a. Is the real interest rate on this loan higher or lower than expected?

b. Does the lender gain or lose from this unexpectedly high inflation? Does the borrower gain or lose?

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Microeconomics: Is the real interest rate on loan higher-lower than expected

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Microeconomics: Is the real interest rate on loan higher-lower than expected

Reference No:- TGS047143

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : Explain likely effects of the policy on real gdp

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Microeconomics: Is the real interest rate on loan higher-lower than expected

Reference No:- TGS047143

Recent Questions Asked Microeconomics

Q : Explain likely effects of the policy on real gdp

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