Macro Unit 22.3- Inflation Practice Part 1: Practice- Choose the most likely category for each of the following situations.H = harmed by unanticipated inflation, B = benefits from unanticipated inflation, U = uncertain1. __B__ Hurley, a farmer, buys machinery with a fixed-rate loan to be repaid over seven years2. __H__ A bank lends money at a fixed interest rate3. __U__ Jacob buy
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Macro Unit 2
2.3- Inflation Practice
Part 1: Practice- Choose the most likely category for each of the following situations.
H = harmed by unanticipated inflation, B = benefits from unanticipated inflation, U = uncertain
1. __B__ Hurley, a farmer, buys machinery with a fixed-rate loan to be repaid over seven years
2. __H__ A bank lends money at a fixed interest rate
3. __U__ Jacob buys a new home with an adjustable-rate mortgage
4. __H__ Ben’s savings from his part-time job are in a savings account paying a fixed rate of interest.
5. __H__ Sawyer’s retirement income is earned from assets that pay a fixed rate of interest
6. __B__ Jack signs a rental agreement to pay $1500 a month for an apartment for three years
7. __U__ Kate, a retired bank robber, has put all her retirement money into stocks
8. __B__ The federal government has a $21 trillion debt
9. __H__ A firm signs a contract to provide website consulting services at a fixed price for four years
10. __U__ 90% of a state’s tax revenue is from income tax
11. __B__ Jessica agrees to pay her parents back the price of college tuition after she graduates
12. __H__ Bank of America loaned $10 billion in fixed-rate loans for home mortgages
13. __H__ Desmond and Penny put savings for Charlie’s first car in a savings account paying .25%
interest
Part 2: Check Your Understanding- Assume an economy is experiencing higher inflation which
negatively affects the following individuals. Choose the best category for each of the situations below.
Situation Shoe Leather
Cost Menu Cost AccUonuinttoCf ost
14. Walmart must hire additional workers to replace all
the price tags on their products every week. X
15. An attorney spends two hours each week
researching if her hourly rate is comparable to other
lawyers.
X
16. Each month your rent increases so you can’t set up
an online automatic payment. You must pay cash
and deliver the rent to your landlord in person.
X
17. A grandma increases the number of times she goes
to the grocery store. X
18. The owner of a restaurant spends an extra two
hours a week creating and updating coupons. X
19. You want to sell your car but you prefer to trade it for
something more tangible than cash. X
Video Help: https://goo.gl/sZ7WUT 1
https://www.coursehero.com/file/48809442/Answer-Key-Macro-23-Inflation-Practice-pdf/
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