Question

True or false;

1.Lenders gain when inflation is higher than expected.
2. Lenders lose when inflation is higher than expected
3. real interest rates will never go negative
4. loan contracts specify the nominal interest rate.
5. if inflation is higher than the nominal interest rate. the real interest rate is negative.

Answer 1

well, think about where lenders get their money. for example if the inflation increase then ,lenders are going to receive a high percentage of interest so true... etc.


btw hi!