Suppose that people expect inflation to equal 3 percent, but in fact, prices rise by 5 percent. Describe how this unexpected high inflation rate would help or hurt the following:
a. The gov't
b. a homeowner with a fixed-rate mortgage
c. a union worker in the second year of a labor contract
d. a college that has invested some of its endowment in government bonds
i would really appreciate the help.. i am really lost and dont understand..
a. The gov't
b. a homeowner with a fixed-rate mortgage
c. a union worker in the second year of a labor contract
d. a college that has invested some of its endowment in government bonds
i would really appreciate the help.. i am really lost and dont understand..