Under which one of the following situations would you be better off?
A. You lend a friend $10,000 at 3 percent to be repaid in one year and unanticipated inflation is 6 percent during the year.
B. You borrowed $10,00 at 3 percent to pay for this year's college expenses and unanticipated inflation is 6 percent during the year.
C. You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year.
D. You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year.
Answer: B
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a. True b. False Indicate whether the statement is true or false
An expansion occurs when ________, when ________, or when both of these occur.
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