Assume that the real rate of interest is 5 percent and a lender charges a nominal interest rate of 15 percent. If a borrower expects that the rate of inflation next year will be 10 percent and the actual rate of inflation next year is 12 percent:
a. neither the borrower nor the lender benefits from inflation.
b. both the borrower and the lender lose from inflation.
c. the borrower benefits from inflation, while the lender loses from inflation.
d. the lender benefits from inflation, while the borrower loses from inflation.
c
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Historically those few developing countries which have succeeded in significantly raising their per-capita income levels
A) did not accomplish this with import-substituting industrialization. B) did accomplish this with import-substituting industrialization. C) tended to provide heavy protection to domestic industrial sectors. D) favored industrial to agricultural or service sectors. E) did so to the detriment of their nearest neighbors.
What is a TRUE statement concerning the imposition in the U.S. of a tariff on cheese?
A) It lowers the price of cheese domestically. B) It raises the price of cheese internationally. C) It raises revenue for the government. D) It will always result in retaliation from abroad. E) it leads to higher domestic demand for cheese.
Economies of scale imply that within some range a firm can increase the size of operation and
a. total cost will decrease. b. fixed cost will decrease. c. average total cost will decrease. d. average total cost will increase. e. average variable cost will decrease.
Research suggests that about ________ percent of people living under the poverty line in any given year are chronically poor.
A. 8 B. 13 C. 38 D. 3