Inflation affects borrowers and lenders differently. After signing a contract with a fixed nominal interest rate, it can be expected that
a. borrowers will hope that prices fall.
b. lenders will hope that prices rise.
c. lenders will hope that the purchasing power of money will fall.
d. borrowers will hope that prices rise.
d
Economics
You might also like to view...
A bank's reserve ratio is 5 percent and the bank has $1,000 in deposits. It's reserves amount to
a) $5. b) $50. c) $95. d) $950.
Economics
When an exchange rate is established as a fixed peg, active intervention may be required to maintain the target-pegged rate
a. True b. False Indicate whether the statement is true or false
Economics