← Inflation
Effects: winners and losers (every paper, Question Three)
Winners/losers via fixed money amounts — always compare at least two groups.| Scenario cue | Type | Why |
|---|---|---|
| Tax cuts / low interest rates / export boom | Demand-pull | AD rising faster than capacity |
| Wage settlement above productivity | Cost-push | Unit labour costs rise → supply left |
| NZD falls; imported components dearer | Cost-push | Imported input costs rise |
Winners/losers: run the "fixed money amount" test — whoever receives a FIXED money amount loses.
Who wins and loses, in one line each
- WINS: fixed-rate borrowers (repay in cheaper dollars), holders of real assets, incomes rising faster than inflation.
- LOSES: fixed-income earners, savers/lenders on fixed interest, exporters whose costs rise faster than overseas prices.
Practice for this standard covers the whole topic — flashcards and quiz.