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Suppose that people expect inflation to equal 3 percent, but in fact prices rise by 5 percent. Describe how this unexpectedly high inflation rate woud help or hurt the following: 1. the government, 2. a homeowner with a fixed-rate mortgage, 3. a union worker in the second year of a labor contract, 4. a college that has invested some of its endowment in government bonds.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M964149

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