Answer Happy

QUESTION 1 In the UK, the CPI was equal to 108.5 in 2019, with 2015 being the base year. Which of the following represented the interpretation of this statement? The average level of prices is 8.5 per cent higher in 2019 than in the base year. The inflation rate in 2019 is 108.5 per cent. The CPI equals £108.5 in 2019. O Prices in 2019 are 8.5 per cent higher than in 2018. QUESTION 2 Suppose that you borrowed AED 100,000 in the form of personal from a bank at a fixed nominal interest rate of 4%. When the loan was approved, it was expected that the inflation rate for the next year is 1%. However, one year into the loan term, the inflation rate increased to 4%. What is the effect of an unexpected increase in inflation on the lender? Negative O Flat Neutral Positive