Suppose the Rate of Inflation Unexpectedly Decreases from 7% to 4

question 84

Multiple Choice

Suppose the rate of inflation unexpectedly decreases from 7% to 4%. Which one of the following would most likely benefit from this unexpected reduction in the rate of inflation?

• A) creditors.
• B) a borrower whose loan has a fixed nominal interest rate.
• C) debtors.
• D) workers who are covered by a COLA agreement.

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Definitions:

Unjust Dismissal

Termination of employment without fair reason or in violation of contractual or lawful procedures.

Collective Bargaining

A process where employers and a group of employees negotiate to determine the terms of employment, including wages, hours, benefits, and working conditions.

Dispute Resolution

A broad spectrum of processes including mediation, arbitration, and negotiation used to resolve conflicts or disputes without resorting to litigation.

Welfare Capitalism

A practice where businesses provide welfare services to their employees, such as housing and healthcare, to improve working conditions and loyalty.