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Jay and Joyce meet George, the banker, to work out the details of a mortgage. They all expect that inflation will be 2 percent over the term of the loan, and they agree on a nominal interest rate of 6 percent. As it turns out, the inflation rate is 5 percent over the term of the loan.
a. What was the expected real interest rate?
b. What was the actual real interest rate?
c. Who benefited and who lost because of the unexpected inflation?
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The primary purpose of this Research Methodology Assignment is to give you experience in determining appropriate research methods to be used with the research question and hypotheses you have posed and with the type data you would need to collect ..
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