Business, 30.03.2021 16:40 Yazminwilliams2504
Suppose that people expect inflation to equal 6 percent, but in fact, prices rise by 4 percent.
Indicate whether this unexpectedly low inflation rate helps or hurts each of the following groups or individuals.
Helps
Hurts
The government
A homeowner with a fixed-rate mortgage
A union worker in the second year of a labor contract
A college that has invested some of its endowment in government bonds that are not indexed Treasury bonds
True or False: Inflation hurts borrowers and helps lenders because borrowers must pay a higher rate of interest.
A. True
B. False
Answers: 3
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Suppose that people expect inflation to equal 6 percent, but in fact, prices rise by 4 percent.
Ind...
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