Who is hurt and who is helped by Unanticipated inflation? Identify whether each of the following examples leads to a person or group being hurt or helped by unanticipated inflation. Circle your response, and explain your answer. H the person or group is HURT by unanticipated inflation – G the person or group GAINS from unanticipated inflation – U It is UNCERTAIN if the person or group is affected by unanticipated inflation – 1. extend many fixed rate loans. H G U Explain: 2. A farmer buys machinery with a fixed-rate loan to be repaid over a ten-year period. H G U Explain: 3. Your family buys a new home with an adjustable-rate mortgage. H G U Explain: 4. Your savings from your summer job are in a savings account paying a rate of interest. H G U Explain: 5. A widow lives entirely on income from fixed-rate corporate bonds H G U Explain: 6. A retired couple lives entirely on income from a fixed-rate pension the woman receives from her former employer. H G U Explain: 7. A retired man relies entirely on income from Social Security. H G U
Who is hurt and who is helped by Unanticipated inflation? Identify whether each of the following examples leads to a person or group being hurt or helped by unanticipated inflation. Circle your response, and explain your answer. H – the person or group is HURT by unanticipated inflation G – the person or group GAINS from unanticipated inflation U – It is UNCERTAIN if the person or group is affected by unanticipated inflation 1. extend many fixed rate loans. H G U Explain: 2. A farmer buys machinery with a fixed-rate loan to be repaid over a ten-year period. H G U Explain: 3. Your family buys a new home with an adjustable-rate mortgage. H G U Explain: 4. Your savings from your summer job are in a savings account paying a rate of interest. H G U Explain: 5. A widow lives entirely on income from fixed-rate corporate bonds H G U Explain: 6. A retired couple lives entirely on income from a fixed-rate pension the woman receives from her former employer. H G U Explain: 7. A retired man relies entirely on income from Social Security. H G U