CHAPTER Inflation: Who Wins, and Who Loses? Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-1 Effects of Inflation on the Purchasing Power of a $100,000 Salary Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-2 U.S Consumer Price Index: January 1960–July 2006 Source: U.S Department of Labor: Bureau of Labor Statistics, http://research.stlouisfed.org/fred2/series/ CPIAUCNS/downloaddata (accessed September 7, 2006) Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-3 Cost of a U.S University Education for One Year at Various Inflation Rates Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-4 The Circular Flow Diagram Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-5 Relationship among Nominal Interest Rate, Real Interest Rate, and Expected Inflation Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-6 Effects of Inflation When Expected Inflation = Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-7 Effects of Inflation When Expected Inflation > Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-8 Effects of Inflation when Expected Inflation < Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-9 When are Lenders and Borrowers Hurt and Helped by Inflation? Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-10 Adaptive Expectations Theory Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-11 Rational Expectations Theory Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-12 When are Laborers and Businesses Hurt and Helped by Inflation? Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Economic Information for Switzerland, 2001–2005 Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved ... Circular Flow Diagram Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-5 Relationship among Nominal Interest Rate, Real Interest Rate, and Expected Inflation... South-Western, a part of Cengage Learning All rights reserved Exhibit 5-6 Effects of Inflation When Expected Inflation = Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning All rights... Effects of Inflation When Expected Inflation > Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning All rights reserved Exhibit 5-8 Effects of Inflation when Expected Inflation