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Inflation affect the increase in social security

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Reference no: EM132456751

Macroeconomics

  1. A newspaper article once reported that the U.S. economy was experiencing a low rate of infla- tion. It said that "low inflation has a downside: 45 million recipients of Social Security and other benefits will see their checks go up by just 2.8 percent next year."
    1. Why does inflation affect the increase in Social Security and other benefits?
    2. Is this effect a cost of inflation, as the article suggests? Why or why not?

Reference no: EM132456751

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