ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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: -Inflation is calculated as a percentage change in CPI and use inflation as a key independent variable.

Detailed explanation-3: -Fixed-income investments are considered to be stable and steady. However, there are factors impacting the yield of these instruments. One such factor is inflation. Inflation refers to the rise in the level of prices of commodities, services etc., They tend to have an impact on the fixed income instruments as well.

Detailed explanation-4: -Does inflation affect fixed-rate mortgages? If you are already paying off an existing fixed-rate mortgage loan, higher inflation will not impact your payment. Your interest rate is already fixed and won’t rise even if interest rates rise for new mortgages.