Last year both a borrower and a lender expected an inflation rate of 3 percent when they signed a long-term loan agreement with fixed nominal interest rates of 5 percent. If the actual inflation rate were lower than expected, then which of the following would be true?A. The borrower would benefit. B. The lender would benefit. C. The real interest rate would be lower than expected. D. The nominal interest rate would be higher than expected.

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