If inflation is higher than expected, then borrowers make nominal interest payments that are less than they expected.

Name: If inflation is higher than expected, then borrowers make nominal interest payments that are less than they expected.
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Question

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If inflation is higher than expected, the real value of the payments made by borrowers is less, but the nominal amount of their payments does not change based on inflation expectations.

If Inflation Is Higher Than Expected, Then Borrowers Make Nominal