Question

theres a surge in inflation. who will gain from this? identify if each person or group would or would not.
people or group gain or loses
the owner of a small courier business leasing four vans. choose your answer...
a family who had just taken out a mortgage on their new home. choose your answer...
a retired mechanic relies on social security. his monthly income stays the same as basic goods such as groceries, gas and medicine increase. choose your answer...
school children who have their savings in 30% savings accounts choose your answer...
a student with a $10,000 student loan choose your answer...

Explanation:

• The owner of a small courier business leasing four vans: During inflation, the cost of goods and services (including van leasing) may rise. If the business can pass on these increased costs to customers (e.g., by increasing delivery fees), the owner may not lose. But if they can't, they may face higher costs without corresponding revenue increases. Assuming they can adjust prices (common in business - they can increase shipping rates to cover higher costs), they may gain or at least not lose significantly.
• A family who had just taken out a mortgage on their new home: With inflation, the value of money decreases over time. The family's mortgage payments (in nominal terms) remain the same (assuming a fixed - rate mortgage). But in real terms (adjusted for inflation), the burden of paying back the loan decreases. For example, if inflation is high, the money they pay back in the future is worth less than the money they borrowed. So they gain.
• A retired mechanic relying on Social Security with fixed monthly income as basic goods prices rise: His income is fixed. As the prices of groceries, gas, and medicine (which he needs) increase, his purchasing power (the amount of goods and services he can buy with his fixed income) decreases. So he loses.
• School children with savings in 30% savings accounts (assuming this is a typo and maybe a low - interest savings account): Savings accounts typically have interest rates. But if inflation is higher than the interest rate on the savings account, the real value (purchasing power) of their savings decreases. For example, if inflation is 5% and the savings account interest is 2%, the real return is \(2\% - 5\%=- 3\%\). So they lose.
• A student with a $10,000 student loan (assuming a fixed - rate loan): Similar to the mortgage case. As inflation occurs, the real value of the loan (the value in terms of what the money can buy) decreases. The student pays back the loan with dollars that are less valuable in real terms. So they gain.

Answer:

1. The owner of a small courier business leasing four vans: Gain (assuming they can adjust prices)
2. A family who had just taken out a mortgage on their new home: Gain
3. A retired mechanic relying on Social Security: Lose
4. School children with savings (assuming low - interest savings): Lose
5. A student with a $10,000 student loan: Gain