Presume that people expect inflation to equal three percent, Ask an Expert

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Presume that people expect inflation to equal three percent, but in fact, prices rise by one percent.

Explain how this unexpectedly low inflation rate would help or hurt the following:

1. Homeowner with a fixed- rate mortgage

2. A union worker in the second year of a labor contract

3. An individual who purchased inflation-indexed Treasury bonds

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91225115

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