Question
Problem 2: If inflation rises unexpectedly by 7%, indicate for each of the following whether the person or institution is helped, hurt, or unaffected. a.
Problem 2: If inflation rises unexpectedly by 7%, indicate for each of the following whether the person or institution is helped, hurt, or unaffected.
a. A retired person who is living on a fixed monthly pension.
b. A real estate agent whose income is based on commission and the price of housing is rising as fast as inflation.
c. A mortgage company who has loaned out money at a very low fixed rate of interest.
d. A CEO of a major retail company who was successful in negotiating a cost-of-living adjustment in their annual salary package.
e. A young doctor who has over $100,000 in student loan debt that is subject to a 5% rate of interest.
f. A furniture salesperson whose income is based on commission but due to rapidly rising prices furniture sales have fallen rapidly and the store where they work is having to offer discounted prices.
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