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Question 6 A. A friend has asked you to lend him some money for his business venture.Explain using the concept of real and nominal interest

Question 6

A. A friend has asked you to lend him some money for his business venture.Explain using the concept of real and nominal interest rate, how anticipated inflation plays an important part in you deciding on the rate of interest you should charge.2 Marks

B. Reflect on an occasion where you or someone you know has been affected by unanticipated inflation.1 Mark

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