Posted by **maya** on Monday, April 25, 2011 at 12:53am.

supposes that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Then inflation turns out to be higher than they both expectedInflation during the 1970s was much higher than most people had expected when the decade began.How did this affect homeowners who obtained fixed-rate mortgages during the 1960s?

How did it affect the banks who lent the money?

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