Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Then inflation turns out to be lower than they both expected.

(1) True or False: The real interest rate on this loan is lower than expected.
The lender (2) gains/loses from this unexpected lower inflation, and the borrower (3) gains/loses under these circumstances.
Inflation during the 1970s was much higher than most people had expected when the decade began.
Homeowners who obtained fixed-rate mortgages during the 1960s (4) were harmed by/benefited from the unexpected higher inflation (with regard to their mortgages), and the banks that made the mortgage loans (5) were harmed/benfited?

1. false , 2.gains , 3. losses , 4 harmed , 5 benefited

Explanation:

1. Real interest rate ≈ Nominal interest rate - Inflation rate

  Inflation rate has an inverse/negative relationship with Real interest rate,  an   increase in inflation rate will cause a decrease in real interest rate

2 if interest rate rises the lender gains because the borrower will now pay more interest on the loan

3. Borrower losses because more interest would need to be paid

4 harmed. when inflation rate increased in the 1970s interest rate fell drastically and borrowers could have paid lower interest if they were not on fixed interest rate

5 banks benefited they the interest rate on loans they made was not affected by the fall in the interest rate

there are so many examples for that in different areas, like biology experiment carried out in our lab recently.

here's one link :

you're crazy if you think that someone is going to write a 500 word report for you.