If inflation is higher than expected, then lenders receive interest payments whose real values are less than they expected.

Name: If inflation is higher than expected, then lenders receive interest payments whose real values are less than they expected.
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Question

Quizplus · Accepted Answer

When inflation is higher than expected, the purchasing power of the money repaid to lenders, including interest payments, decreases, meaning the real value of these payments is less than anticipated.

If Inflation Is Higher Than Expected, Then Lenders Receive Interest