Question: In the 1970s, a big increase in the Federal budget deficit was not offset by higher interest rates, so the rate of inflation tripled. In the 1980s, a big increase in the deficit was offset by higher interest rates, so inflation declined. Suppose that Congress votes a $200 billion a year increase in medical care benefits without any corresponding increase in taxes. Explain how you would change your business strategy if you were a company executive in the following industries:
(A) Manufacturer of railroad cars.
(B) Hardware store retailer.
(C) Stockbroker.
(D) Furniture manufacturer.
(E) Pension fund manager.