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1. Suppose you borrowed money at a fixed rate of interest of 5% p.a. for 5 years. At the time expected inflation was 2%. In

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1. Suppose you borrowed money at a fixed rate of interest of 5% p.a. for 5 years. At the time expected inflation was 2%. In terms of your loan commitment, you would be happiest if: A. Inflation increased unexpectedly to 5% per annum. B. Inflation decreased unexpectedly to 1%per annum C. Inflation stayed the same D. Inflation decreased to 0%

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