3. Suppose that a bank expects inflation to be 3 percent and charges borrowers an interest rate of 5 percent accordingly. Now suppose that inflation is actually 4 percent. In this case, inflation: A) does not affect the distribution of income. B) redistributes income from the bank to the bank's borrowers. C) redistributes income from the bank's borrowers to the bank. D) redistributes income from the bank to the bank's lenders