Macro 2.5-Unexpected Inflation-Who is Hurt, Who Benefits Practice 1

Banks extend many fixed rate loans

A farmer buys a tractor with a fixed rate loan to be repaid over a 10 year period.

Your family buys a new home with an adjustable rate mortgage

You're saving your summer earnings in a savings account earning a fixed interest

A widow lives entirely on income from fixed rate corporate bonds

A retired man lives entirely on S.S.

A retired bank official lives entirely on income from stock dividends

A firm signs a contract to provide maintenaince services at a fixed rate for the next 5 years.

A state government receives revenue mainly from an income tax.

A local gov. recieves revenue mainly from fixed-rate license fees charged to businesses.

Your friend rents an apt. with a 3 year lease.