1. Inflation can cause difficulty in many ways. Which group would have the greatest problem during periods of high inflation that last several years?
a.) Older, working couples saving for retirement.
b.) Older people living on fixed retirement income.
Older people tend to protect what money they have in retirement using fixed income investments. Sometimes they use CDs; sometimes bonds. But becausethey are no longer earning money, what money they have is deeply impacted by inflation, making it worth less.
Older working couples saving for retirement come in a close second. They are projecting future income based on how much theyhave saved and often make the mistake of not calculating inflation.
Inflation impacts the savings of younger workers, with or without children by whittling away at income they could be saving. c.) Young couples with no children who both work.
d.) Young working couples with children.
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