Question

A8. Consider the situations of a lender of money and a borrower of money. Which of the following situations is least burdensome for the borrower? (A) (B) (C) (D) (E) Nominal interest rate of 4% and an inflation rate of 4%. Nominal interest rate of 15% and an inflation rate of 8%. Nominal interest rate of 8% and an inflation rate of 2%. Nominal interest rate of 10% and an inflation rate of 1%. Nominal interest rate of 29% and an inflation rate of 21%.