2. Suppose Pat loans Chris $1000 in 2017 and the loan is due in 2018. Pat wants to receive a real return of 4% on the loan. a) What interest rate should Pat charge Chris if Pat expects an inflation rate of 1%? What nominal repayment (principal plus interest) is made in 2018? b) Suppose the inflation rate turns out to be 3%. What does the real interest rate turn out to be? c) Given you answer from part (a), what is the nominal repayment in 2018 equivalent to in year 2017 dollars