Explore BrainMass
Share

Effects of Unanticipated Inflation

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Evaluate as accurately as you can how each of the following individuals would be affected by unanticipated inflation of 10 percent per year:
a. A pensioned railroad worker
b. A department store clerk
c. A unionized automobile assembly line worker
d. A heavily indebted farmer
e. A retired business executive whose current income comes entirely from interest on government bonds
f. The owner of an independent small town department store

© BrainMass Inc. brainmass.com October 25, 2018, 7:28 am ad1c9bdddf
https://brainmass.com/economics/contracts/effects-unanticipated-inflation-504356

Solution Preview

a- The railroad worker's income from the railroad will decrease 10% from where it was. This won't change unless the worker has another form of income coming in, besides his/her work on the railroad. She/he will see a decrease in income due to the 10% per yr. inflation increase.

b- A dept. store clerk's income will also decrease by approximately 10% and would be in the same situation as the railroad worker. The increase in inflation will cause a decrease in total income unless the clerk has another source of income.

c- A unionized ...

Solution Summary

This solution explains in detail how each of the individuals listed would be affected by unanticipated inflation of 10 percent per year.

$2.19
See Also This Related BrainMass Solution

Measures of economic activity

- Provide an explanation of GDP, unemployment, and inflation as measures of economic activity. Cite recent examples and issues in each area to support your demonstration of understanding.

-Discuss the extent to which you believe these three measures are related, whether or not it is best to discuss each separately, and why you feel this way. You do need to support your reasoning.

View Full Posting Details