1033EconomicsMedium
If borrowers and lenders agree on a nominal interest rate and inflation turns out to be less than they had expected?
Aneither borrowers nor lenders will gain because the nominal interest rate has been fixed by contract
Bborrowers will gain at the expense of lenders
CNone of these answers
Dlenders will gain at the expense of borrowers
Correct answer
D. lenders will gain at the expense of borrowers
Explanation
The correct answer is lenders will gain at the expense of borrowers.