Identify how each of the following individuals is influenced by unexpected inflation.a. A sales representative paid a set percentage commission based on the dollar value of her sales is (Click to select) due tounexpected inflation.b. A financial investor who lives off income made from buying and selling mortgaged commercial property is (Click to select) due tounexpected inflation.c. A retiree who lives on interest payments from his bank deposits is (Click to select) due to unexpected inflation.d. A storekeeper whose costs and revenues both rise by inflation is [ (Click to select)) due to unexpected inflation.e. A person who lives off income made buying and selling items on online auction sites is (Click to select) due to unexpected inflation.f. A worker with a union contract that incorporates partial indexation of her wage i ✓ (Click to select) due to unexpected inflation.unaffectedbetter offworse off

Inflation is the rate of increase in prices over a given period of time. When people are unaware of…

Identify how each of the following individuals is influenced by unexpected inflation. a. A sales representative paid a set percentage commission based on the dollar value of her sales is (Click to select) due to unexpected inflation. b. A financial investor who lives off income made from buying and selling mortgaged commercial property is (Click to select) due to unexpected inflation. (Click to select) (Click to select) due to unexpected inflation. due to unexpected inflation. d. A storekeeper whose costs and revenues both rise by inflation is e. A person who lives off income made buying and selling items on online auction sites is (Click to select) due to unexpected inflation. f. A worker with a union contract that incorporates partial indexation of her wage i✓ (Click to select)due to unexpected inflation. unaffected c. A retiree who lives on interest payments from his bank deposits is better off worse off

Identify how each of the following individuals is influenced by unexpected inflation. a. A sales representative paid a set percentage commission based on the dollar value of her sales is (Click to select) due to unexpected inflation. b. A financial investor who lives off income made from buying and selling mortgaged commercial property is (Click to select) due to unexpected inflation. (Click to select) (Click to select) due to unexpected inflation. due to unexpected inflation. d. A storekeeper whose costs and revenues both rise by inflation is e. A person who lives off income made buying and selling items on online auction sites is (Click to select) due to unexpected inflation. f. A worker with a union contract that incorporates partial indexation of her wage i✓ (Click to select)due to unexpected inflation. unaffected c. A retiree who lives on interest payments from his bank deposits is better off worse off

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For each of the following, circle whether the person or organization described is helped, hurt, or not affected by inflation. Then, explain your answer. 1. Banks that extend fixed-rate loans. Helped Hurt Unaffected 2. Farmers buy machinery using a fixed-rate loan. Helped Hurt Unaffected 3. Your family buys a new home using an adjustable-rate mortgage. Helped Hurt Unaffected 4. You have a savings account paying a fixed-rate of interest. Helped Hurt Unaffected 5. A retired couple lives entirely on fixed pensions from former employers. Helped Hurt Unaffected 6. You work a job that does not offer you a COLA. Helped Hurt Unaffected 7. Banks that offer adjustable-rate loans. Helped Hurt Unaffected
3. The index number representing the price level changes from 114 to 110 in one year. The inflation rate during the year is _____ percent. Round your answer to two digits to the right of the decimal (for example, 7.19) and do NOT include the word "percent" or the percent symbol in your answer. Negative rates are possible.
de whetner this unexpected lower rate of inflation would help or hurt each of the following groups. a. A homeowner with a fixed-rate mortgage b. A union worker with a fixed labor contract. C. A company that has invested some of its endowment in government bond which pay fixed rate of return.
Suppose that Lauren is a savvy investor and expects inflation to equal 7 per cent in 2020, but, in fact, prices rise by only 4 per cent. How would this unexpectedly low inflation rate affect her in the following circumstances? a The federal government cuts income tax. b She has a fixed-rate mortgage home loan. c She is a casual worker with no labour contract in place. d She has invested in Treasury bonds.
Answer iv
The relationship between the inflation rate and the unemplotment rate is it a micro or macro decison? explain why
Suppose that people expect inflation to equal 3 percent, but in fact, prices rise by 5 percent. Describe how this unexpectedly high inflation rate would help or hurt the following:a) the governmentb) a homeowner with a fixed-rate mortgage
Analyze the causes of inflation. Give examples
Suppose that people expect inflation to be 3 percent but that, in fact, prices rise by 10 percent. Briefly describe whether this unexpectedly high inflation would either a) help or hurt the following people, and b) why.a. A person receiving Social Security;b. A homeowner with a fixed-rate mortgage;c. a union worker in the second year of a labor contract with fixed wages;d. a family on food stamps (SNAP) who needs to buy groceries;e. a person trying to pay off their variable-rate charge cards;f. A restaurant that has not bought supplies yet and can't change the menu prices.
Answer v
The table below has in the first column the expected inflation rate and the second column contains the actual inflation rate. Using your knowledge about real and nominal rates, which years are better for borrowing compared to lending? Explain your reasoning. Year Expected Inflation (%) Actual Inflation (%) 2011 3.76 3.14 2012 1.62 2.07 2013 1.52 1.47 2014 1.72 1.62 2015 0.08 0.12 2016 1.00 1.27 2017 2.06 2.14 2018 2.73 2.43 2019 1.77 1.81 2020 1.37 1.25
Answer ii