Question

Consider the following: 1. Banks that lend money to customers,2. Consumers use credit cards for purchases,3.retired people on fixed incomes,4. college students taking out student loans

In the reading it argues that inflation redistributes income,that is not neccessarily fair or equitable Some people and companies are more vulnerable than others. Some people and companies can adjust income to combat higher prices and redistribution.

1.List the four above from least to most vulnerable.

2. In paragraphs 1-4 explain why you ranked them in this order,and how they can adjust spending and income?

3. Paragraph 5, explain why you selected the ranking you did?

Answer 1

1) ranking the most to least vulnerable - Student, Consumers use credit card, Retired people and Banks

2) I ranked the student most vulnerable because it does not have any income nd is currently one loan and with inflation and redistribution of income, it is more likely that itwould have to pay a greater interest on the loan.

The consumers who use credit cards are vulnerable thereafter as they have the most chances to default having no disposable income when they have to repayd the bank the credit of the money spent for present purchases.

Third is, the retired people because they have a limit of fixed income from which they are spending the money and and they should spend less from the fixed income and thereby are more prone to inflation effects as if prices increase they would have lesser disposable income in hand to spend.

Fourth are the banks who have defaulters on the loans that they give out to the customers and as banks can adjust their rates of interest based on inflation hence they are less vulnerable than the others.

3) reason why I gave the rankings:

student most vulnerable because it does not have any income nd is currently one loan and with inflation and redistribution of income, it is more likely that itwould have to pay a greater interest on the loan.

The consumers who use credit cards are vulnerable thereafter as they have the most chances to default having no disposable income when they have to repayd the bank the credit of the money spent for present purchases.

Third is, the retired people because they have a limit of fixed income from which they are spending the money and and they should spend less from the fixed income and thereby are more prone to inflation effects as if prices increase they would have lesser disposable income in hand to spend.

Fourth are the banks who have defaulters on the loans that they give out to the customers and as banks can adjust their rates of interest based on inflation hence they are less vulnerable than the others.