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Assume you are borrowing money from a car dealer today to purchase a new car. It is expected that inflation will average 3% per year

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Assume you are borrowing money from a car dealer today to purchase a new car. It is expected that inflation will average 3% per year over the next five years - the life of the car loan. This inflation expectation has been built into the interest rate you are being charged on the five-year, fixed interest rate car loan - the rate, and therefore your monthly payment, cannot be changed. Based on the facts above, it will benefit the lends if the actual inflation rate over the next five years turns out to be lower than the expected inflation rate at the time the loan was made. Indicate whether the statement is TRUE FALSE; and then provide support for your

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