Suppose you agree to lend money to your friend on the day you both enter college at

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Suppose you agree to lend money to your friend on the day you both enter college at what you both expect to be a zero real rate of interest. Payment is to be made at graduation, with interest at a fixed nominal rate. If inflation proves to be lower during your college years than what you both had expected, who will gain and who will lose?

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Macroeconomics Principles And Policy

ISBN: 9780324586213

11th Edition

Authors: William J. Baumol, Alan S. Blinder

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