AP MACRO : Inflation

A farmer buys machinery with a fixed rate loan to be repaid over a ten-year period.

• Hurt by unanticipated inflation

• Gains from unanticipated inflation

• Uncertain if he is affected by unanticipated inflation

Your savings from a summer job are in a savings account paying a fixed rate of interest

• Hurt by unanticipated infaltion

• Gains from unanticipated inflation

• Uncertain if you are affected by unanticipated inflation

A widow lives entirely on income from fixed-rate corporate bonds.

• Hurt by unanticipated inflation

• Gains from unanticipated inflation

• Uncertain if she is affected by unanticipated inflation

You buy a new home with an adjustable-rate mortgage.

• Hurt by unanticipated inflation

• Gains from unanticipated inflation

• Uncertain if you are affected by unanticipated inflation

Banks extend many fixed-rate loans.

• Hurt by unanticipated inflation

• Gain from unanticipated inflation

• Uncertain if they are affected by unanticipated inflation

A retired man lives entirely on income from Social Security.

• Hurt by unanticipated inflation.

• Gains from unanticipated inflation.

• Uncertain if he is affected by unanticipated inflation.

The federal government has a $20 trillion debt.

• Hurt by unanticipated inflation.

• Gains from unanticipated inflation.

• Uncertain if the government is affected by unanticipated inflation.

You rent an apartment with a three-year lease.

• Hurt by unanticipated inflation.

• Gain from unanticipated inflation.

• Uncertain if you are affected by unanticipated inflation.

A local government receives revenue mainly from fixed-rate license fees charged to businesses.

• Hurt by unanticipated inflation.

• Gains from unanticipated inflation.

• Uncertain if the government is affected by unanticipated inflation.

Parents are putting savings in their child's college education account.

• Hurt by unanticipated inflation.

• Gain from unanticipated inflation.

• Uncertain if the account is impacted by unanticipated inflation.