11 In each of the following situations, explain whether borrowers or lenders are worse off, better off, or equally well off because of unexpected inflation.

a Expected inflation one year ago was 4 percent;

actual inflation over the year turned out to be 7 percent.

b Expected inflation one year ago was 5 percent;

actual inflation over the year turned out to be 3 percent.

c The nominal interest rate on a loan was 8 percent; the expected real interest rate on ?