Assume that there is a fixed rate of interest on contracts for borrowers and lenders. if unanticipated "deflation" occurs in the economy, then: a. both lenders and borrowers benefit b. both lenders and borrowers are hurt c. borrowers are hurt, but lenders benefit d. lenders are hurt, but borrowers benefit

Lander is hurt but borrowers are benefits.  

Explanation:

The fixed rate of interest: It is fixed as indicated in the name of this interest. When someone looking for a loan then they found a lot of types of loans. A person can be fixed deposit or take the fixed loan on many things such as a car, home, etc. When you take a fixed loan then the rate of interest does not fluctuate. So on that rate of interest, the person knows how much interest he had to pay on a fixed loan and how much overall to pay off the loan based on the interest rate. There are the benefits of the rate of fixed loan because when another market index rate increase or decrease it will not affect your fixed-rate loan interest. It will be the same in every condition.

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