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Endowment in government bonds

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Reference no: EM131043379

Suppose that people expect inflation to equal 3 percent, but in fact, prices rise by 5 percent. Describe how this unexpectedly high inflation rate would help or hurt the following:

a. The government

b. a homeowner with a fixed-rate mortgage

c. a union worker in the second year of a labor contract

d. a college that has invested some of its endowment in government bonds

Reference no: EM131043379

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