Heavy use of long-term debt may be beneficial in an inflationary economy because - 4672

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 Heavy use of long-term debt may be beneficial in an inflationary economy because 

A) the debt may be repaid in more "expensive" dollars. 

B) nominal interest rates exceed real interest rates. 

C) inflation is associated with the peak of a business cycle. 

D) the debt may be repaid in "cheaper" dollars. 

 

Answer: D Difficulty: Medium Type: Conceptual 

 
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