Marta lends money at a fixed interest rate and then inflation turns out to be higher than she had expected it to be. The real interest rate she earns is Group of answer choices lower then she had expected, and the real value of the loan is lower than she had expected. lower than she had expected, and the real value of the loan is higher than she had expected. higher than she had expected, and the real value of the loan is higher than she had expected. higher than she had expected, and the real value of the loan is lower than she had expected.

lower than she had expected, and the real value of the loan is lower than she had expected.

Explanation:

A loan can be defined as an amount of money that is being borrowed from a lender and it is expected to be paid back at an agreed date with interest.

Generally, the financial institution such as a bank lending out the sum of money usually requires that borrower provides a collateral which would be taken over in the event that the borrower defaults (fails) in the repayment of the loan.

Inflation can be defined as the persistent general rise in the price of goods and services in an economy at a specific period of time.

Generally, inflation usually causes the value of money to fall and as a result, it imposes more cost on an economy.

In this scenario, Marta lends money at a fixed interest rate and then inflation turns out to be higher than she had expected it to be. Thus, the real interest rate she earns is lower than she had expected, and the real value of the loan is lower than she had expected.

answer; (1) blank; decreases; ///blank(2) increases; ///blank(3)increases;

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