Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan.Then inflation turns out to higher than they both expected as it did in the 1970s.Is the real interest rate on the loan higher or lower than expected?How would it affect homeowners who obtained fixed-rate mortgages during the 1960s.How did it affect the banks that lent the money?How would your answer differ about the homeowners and the banks if the interest rate was a variable interest rate? How is risk shifted?