Living off the interest income from long-term bonds

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a. Consider two people: Joe Grad, who has just finished college and started a job, and has $50,000 of student loan debt; and John Gramps, who is retired and living off the interest income from long-term bonds.

b. Suppose instead that deflation sets in, and the inflation rate falls from 0% to minus 10%. How does this change affect Joe, and why? What about John?

Reference no: EM131071556

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