PPSCFPSCNTSPakistan govt jobs
- Subject
- Inflation & Productivityeconomics-mcqs › inflation-productivity
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
If both borrowers and lenders agree on a nominal interest rate, but the actual inflation rate ends up being lower than expected, who benefits from this outcome?
Multiple choice question for Inflation & Productivity. Select an option, then review the explanation below.
Explanation
When inflation is lower than anticipated, the real interest rate is higher than expected, which advantages lenders and disadvantages borrowers because the nominal interest rate was agreed upon beforehand.
More Inflation & Productivity MCQs
Practice related questions from the same subject.
- 1.According to the Phillips curve theory, when does unemployment revert to its natural rate?
- 2.What do menu costs signify in the context of inflation?
- 3.What is the effect of a rise in production costs on the economy?
- 4.What is the likely effect on the economy when injections into it increase?
- 5.Which of the following can trigger demand-pull inflation?