Assume the situations faced by the subsiquent individuals

Reference no: EM1330136

Inflation

Suppose that in 2009 there is a sudden, anticipated burst of inflation. Consider the situations faced by the following individuals. Who gains and who loses?

a. A homeowner whose wages will keep pace with inflation in 2009 but whose monthly mortgage interest payments to a savings bank will remain fixed

b. An apartment landlord who has guaranteed to his tenants that their monthly rent payments during 2009 will be the same as they were during 2008

c. A banker who made an auto loan that the auto buyer will repay at a fixed rate of interest during 2009

d. A retired individual who earns a pension with fixed monthly payments from her past employer during 2009

Reference no: EM1330136

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