Royalty for a Day!

Who is hurt the most by

Unanticipated

Inflation?

Do Now: copy this chart

Priscilla: Homeowner/worker

Mayor: Government official

Peter: Store owner

Theresa: Union auto worker

Jerry: Real-estate speculator

Elmer: Retiree

Mr. Sad Class: School teacher

Lucy: High school senior

Bernie: Bank President

Helga: Retiree

Jerome: Potential home buyer

Lawrence: British business owner

Gains or Hurt by inflation? REASON

Priscilla: Homeowner/worker

Mayor: Government official

Peter: Store owner

Theresa: Union auto worker

Jerry: Real-estate speculator

Elmer: Retiree

Mr. Sad Class: School teacher

Lucy: High school senior

Bernie: Bank President

Helga: Retiree

Jerome: Potential home buyer

Lawrence: British business owner

Gains or Hurt by inflation? REASON

Priscilla: Homeowner/worker Gain Wages increase above inflation rate.

Could cause cost-push inflation

Mayor: Government official Gain Higher tax receipts/ able to repay debt / loan with lower purchasing dollars

Peter: Store owner Hurt Costs are rising faster than revenue

Theresa: Union auto worker Gain COLA matches wages and inflation/

Pay raise wage above inflation

Jerry: Real-estate speculator Gain Money borrowed is repaid with dollars

having lower purchasing power

Elmer: Retiree Hurt Purchasing power of fixed-income savings decreases

Mr. Sad Class: School teacher Hurt Wages are not keeping up with inflation

Lucy: High school senior Hurt Saved dollars have less purchasing power

Bernie: Bank President Hurt Bank loans paid back with inflated dollars, which buy less

Helga: Retiree Hurt Saved dollars have less purchasing power

Jerome: Potential home buyer Uncertain Will gain if real interest rate falls. Will be hurt if real interest rate rises

Lawrence: British business owner Gain Signed contract locked in lower price