Question

.The Bank of King's Landing has made many loans to the lords of Winterfell. The Bank is considering whether they will benefit or not if the rate of inflation changed. Under which circumstance would the Bank realize an unexpected benefit

Answer 1

The Bank of King's Landing would realize an unexpected benefit when the actual rate of inflation is lower than the expected rate of inflation.

Effect of Change in Inflation Rate on Lending

In monetary economics, when the actual rate of inflation is lower than projected, the lender or bank benefits since it is similar to receiving a bonus.

The lender or the bank, on the other hand, will lose if the rate of inflation is higher than predicted.

As a result, when the actual rate of inflation is lower than the forecast rate of inflation, the Bank of King's Landing will gain unexpectedly.

The reason for this is that the amount they receive will be worth more than they anticipated when they made the loans to the lords of Winterfell.

Learn more about how inflation affects lending here: brainly.com/question/14988663.