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1. Suppose that political upheaval in Argentina has sparked rampant inflation.
a. Explain how this unexpected inflation would impact the following groups:
i. Retirees living on a fixed monthly pension.
ii. Banks with many outstanding loans that are being repaid at fixed interest rates.
B Assume that the central bank of Argentina has the same tools of monetary policy as the Fed in the United States. Explain one monetary policy that the central bank could use to lesson the inflation.
C. Using a correctly labeled graph, show how the monetary policy you identified in B would affect the Argentinian money supply and Argentinian nominal interest rates.
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