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Home / Questions / Suppose that two parties agree that the (expected) inflation rate for the following year is 3% and,

Suppose that two parties agree that the (expected) inflation rate for the following year is 3% and,

Suppose that two parties agree that the (expected) inflation rate for the following year is 3% and, based on this, they enter into an agreement for a simple loan at an interest rate of 7%. If the inflation rate the following year turns out to be 2%, who gains and who loses?

 

Apr 25 2020 View more View Less

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