Question: 8. Suppose real interest rate r = 4% and expected inflation rate for the following year En = 4%. (a) What is the nominal

8. Suppose real interest rate r = 4% and expected inflation rate for the following year En = 4%. (a) What is the nominal interest rate? (2 points) (b) What is the ex ante real interest rate? (2 points) Suppose the actual inflation rate at the end of the following year turned out to be 6%. (c) What is the ex post real interest rate? (3 points) (d) Borrowers (gain/lose). and lenders (gain/lose) (f) Borrowers (gain/lose). Suppose the actual inflation rate at the end of the following year turned out to be 2% (e) What is the ex post real interest rate? (3 points) (4 points) and lenders (gain/lose) (4 points)

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