Question

If inflation rises unexpectedly by 5%, indicate for each of the following why the economic actor is helped, hurt, or unaffected: a) A union member with a COLA wage contract. b) Someone with a large stash of cash in a safe deposit box. c) A bank lending money at a fixed rate of interest. d) A person who is not due to receive a pay raise for another 11 months.

Answer 1

The person who is helped by the unexpected inflation is a person who is not due to receive a pay raise for another 11 months.

What is inflation?

Inflation is when there is a rise in the general price levels of an economy. When inflation is not expected, it would not be factored into the prices in the economy. Thus, those who received fixed wages are hurt. Also lenders are hurt.

A person who is not due to receive a pay raise for another 11 months is helped because in 11 months, the inflation would already be factored into the wage increase.

To learn more about inflation, please check: https://brainly.com/question/15692461

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