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9) Explain why inflation may tend to accelerate.
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Solved in 3 steps
- If, over time, wages and salaries on average rise at least as fast as inflation, why do people worry about how inflation affects incomes?20) Some inflation is actually considered good. Explain why that is.23) How might big companies ,such as Walmart, avoid contributing to inflation when raising employees wages ?
- 1i. Describe TWO (2) types of inflation. 1ii. Assess TWO (2) ways in which inflation may have an impact on an economy.1. What causes inflation?1. Explain the factors that causes demand-pull inflation. 2. Explain the factors that causes cost-push inflation. 3. If consumer spending decreases due to a decrease in consumer confidence, which of the two (aggregate demand or aggregate supply) will be affected, and which direction (leftwards or rightwards) will it shift in the economy?
- 1. Describe the society having higher inflation.6. In 2023, breakthroughs in solar panel manufacture and installation and low-cost battery storage allow tens of millions of Americans and businesses to slash their energy bills and produce more for every energy dollar. Assume the growth rate in 2022 was 2% and inflation was 2% a. Show what kind of effects these breakthroughs would have on inflation and growth in 2023 and on into the long run. b. Assume the Federal Reserve aims to keep inflation at 2% per year. What would the Fed do in response to the events of 2023? Assume the economy is at its second short run equilibrium after the 2023 events when the Fed acts (i.e, shift SRAS once due to a change in expected inflation before modeling the Fed's action). What does the Fed's action do to inflation and growth in the short run? How would the Fed's actions work out in the long run?11 The Jamaican government’s economic policy seems to be targeting inflation. Discuss the pros and cons of this policy direction