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Suppose a person named Rachel borrows $100,000 in 2022 which she needs to pay back to the Bank of Vargas in a year. The nominal

Suppose a person named Rachel borrows $100,000 in 2022 which she needs to pay back to the "Bank of Vargas" in a year. The nominal interest rate is 35% while the inflation rate is 25%. Consider how much Rachel must pay back in 2023 to the Bank of Vargas. In terms of purchasing power, how does Rachel's payment in 2023 compare with the original loan amount in 2022? Group of answer choices Rachel's payment in 2023 is higher in purchasing power compared with the original loan amount in 2022 Rachel's payment in 2023 is lower in purchasing power compared with the original loan amount in 2022 Rachel's payment in 2023 is the same in purchasing power compared with the original loan amount in 2022 It unclear which has the higher purchasing power None of the above

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