Explain whether policy makers should be more concerned about the economy going into a recession or facing high inflation and why.

Q: Explain how inflation was finally tamed in the early 1980's. Comment on which policy was used and…

A: NOTE: The question has been answered in a generalized manner. The situation of an increase in the…

Q: Some people have argued that the high inflation of the late 1970s was a consequence of the fact that…

A: The Federal Reserve:It has the responsibility to manage the activities of commercial and financial…

Q: Which perspective is better suited to handling the inflation we face today? Keynesian or…

A: Finding a balance between Keynesian and Neoclassical models is like to riding two horses at the same…

Q: What is demand pull and cost push inflation in economics?

A: Demand pull inflation in simple words we can say that it is the inflation that generally describe…

Q: Why might “belt-tightening” by consumers in a recession be unwelcome?

A: Recession is a phase of business cycle when there is a fall in the economic activity, associated…

Q: How does aggregate demand affect inflation?   How do interest rates affect aggregate demand?

A: The overall demand for goods and services made by all of the customers in the economy is referred to…

Q: In detail, explain how high inflation can lead to a recession in several ways.

A: High inflation refers to a sustained increase in the general price level of goods and services…

Q: What went wrong with the U.S. economy in 2008?

A: The history of the economic facts of several economies has been outstanding and hilarious at the…

Q: During the recession of 2008, Did the US Government take a page of the Keynesian Macro theory to…

A: Keynesian macro theory primarily identifies the role of government or government intervention in…

Q: Many central banks now indicate that their primary objective is to keep inflation at a persistently…

A: The fluctuations in nations GDP overtime is shown by the business cycle models. It helps in showing…

Q: How an economist thinks that the economy works—is it self-regulating or not?—influences his opinion…

A: SELF REGULATING ECONOMY. Classical economists believe in self-regulating economy. Wage rate and…

Q: What prediction can you make about the inflation when a country is in war? Write your answer with…

A: The aggregate demand curve shows the negative relationship between price level and real GDP where…

Q: How do changes in aggregate demand and aggregate supply might cause inflation in the economy?

A: The aggregate demand is the summation of the demand from all the economic agents. There are mainly…

Q: In the “Classical Theory of Inflation”, what determines the price level and the value of money?…

A: Inflation is defined as the rise in the average price level of commodities and services in the…

Q: should the government emphasize full employment, and should the central banks prioritize…

A: Unemployment refers to people who are employable and actively looking for work but can't find one.…

Q: The economy is operating in a recession. What are some government policies that may help the…

A: The recession occurs when there is a fall in the aggregate demand. The fall in the aggregate demand…

Q: Can you compare and contrast the main points of the great recession and the great depression?

A: The great recession is situation of lower economic activity or a movement from the highest peak of…

Q: What does the phrase “inflation is always and everywhere a monetary phenomenon” mean?  Printing more…

A: Changes in the money supply and price level are directly related. Increase in money supply increases…

Q: Explain Keynesian policy for fighting unemployment and inflation.

A: Keynesian economics explains how total expenditure affects production, employment, and inflation.…

Q: What role, if any, does monetary policy play in the Real Business Cycle Model?

A: Monetary policy refers to the actions and decisions taken by a country's central bank or monetary…

Q: When did the British economy first feel the effects of the American-triggered great depression?

A: The great depression is the downturn of the world’s economy in the history of the industrialized…

Q: Suppose an economy has a high rate of unemployment and a high rate of inflation. What kind of policy…

A: The measure that depicts a general rise in the price level of goods and services during a specified…

Q: Why do some economists believe that it may be necessary to live with a certain amount of inflation…

A: When the general price level of goods and services rises in an economy, it is said to be inflation.…

Q: If asset prices fall and inflation expectations remain unchanged, what happens to inflation and…

A: Inflation decreases and unemployment increases.

Q: Stagflation occurs when there is in unemployment and in inflation. This occurs graphically as a

A: Stagflation is characterized by slow economic process and comparatively high unemployment—or…

Q: if the economy is in a recession, who is at fault?

A: Recession refers to the situation of lower economic activity. During recession, economic activities…

Q: How can expectations about the future change what consumer buy now?

A: In economics, the law of demand establishes the negative correlation between the price and the…

Q: What were the causes and consequences of the Great Recession?

A: The great depression as the name itself suggest is one of the greatest event in the history. It…

Q: How does each policy handle the two major macroeconomic failures of unemployment and inflation

A: Considering macroeconomics, it talks about the economy as a whole and not an individual. The major…

Q: Fill in the blank economics studies the problem of inflation in an economy.

A: Inflation is define as decrement in purchasing power/buying power of a particular currency over…

Q: Q2. If output falls, what is likely to happen to inflation and employment?

A: The two factors inflation and unemployment holds an inverse relationship. It means that the rise in…

Q: Is inflation targeting always good? What if we want to keep unemployment low?

A: Inflation targeting has been established in the majority of nations worldwide. The primary duty to…