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Transcript of Inflation
Who is hurt?
Fixed income receivers
Who is unaffected or helped?
people adjust their nominal incomes to reflect price changes
I need a raise!
Lenders build inflation rates into their interest rates
real interest rate = nominal interest rate - inflation
Real interest= the percentage increase in purchasing power that the borrower pays the lender
Caused by an excess of total spending beyond the economy's level to produce
Caused by rising per-unit production costs.
Union workers with COLAS