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You have gone to the bank to borrow money for one year. The nominal rate is 7.5%. The real rate of interest is 4%. Over the course of the year, overall prices increased by 4%. This rate of inflation hurt the _____ because the actual rate of inflation was _____ than the anticipated rate of inflation.

a. lender; higher

b. lender; lower

c. borrower; lower

d. borrower; higher

Accounting Basics, Accounting

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  • Reference No.:- M9413151

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