ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Alex, who won lottery
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Jasmine, retired person with COLA
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Brandon, college student
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Juan, who is on a fixed income
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Detailed explanation-1: -As inflation rises, it creates both winners and losers. Right now, it’s mostly losers. Inflation benefits those with fixed-rate, low-interest mortgages and some stock investors. Individuals and families on a fixed income, holding variable interest rate debt are hurt the most by inflation.
Detailed explanation-2: -Impact of Inflation on Fixed Income Investments The interest rates generated through fixed-income investments are generally lower as compared to the higher rate of inflation. Bond prices are inversely rated to interest rates. Inflation causes interest rates to rise, leading to a decrease in value of existing bonds.
Detailed explanation-3: -People who have to repay their large debts will benefit from inflation. People who have fixed wages and have cash savings will be hurt from inflation. Inflation is a situation where the money will be able to buy fewer goods than it was able to do so as the value of money comes down.