Assume the CPI increases from 100 to 110. Explain the impact of this inflation on each of the following:
a.A surveyor who took out a 5% fixed-rate loan last year to buy new equipment.
b.A bank that awarded a 6% fixed-rate loan to a couple buying their first home.
c.A company signs a contract to clean classrooms at a fixed rate for the next 5 years. The company does not have a labor contract with its employees.
d.A union worker who received a 10% cost of living adjustment.
e.A student who currently earns 2% interest on her savings account
Thursday, March 17, 2011
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