The most likely explanation for why the price index is rising is because   People are receiving greater income from helicopter checks and extended unemployment benefits so they can be more discriminating buyers to find the lowest prices. People are receiving greater income from helicopter checks and extended unemployment benefits and the money is beginning to enter the real economy. Firms are receiving more orders so productivity is

Q: As a result of the change in real GDP, will an increase in the interest rate on bank loans lead to…

A: The increase in the real GDP and the increase in the interest rate are two different factors. When…

Q: The table describes four possible outcomes for 2017, depending on the level of aggregate demand in…

A: The aggregate supply curve shows the quantity of total goods and services produced and supplied in…

Q: Do you think that we should try to control inflation or that we should let the market take care of…

A: Inflation refers to a rise in the general price level of goods and services for particular period of…

Q: compare between demand pull and cost push inflation

A: Inflation: It is the situation when there is a rise in the price of goods and services that leads to…

Q: There was a fall in investment spending by business in the third quarter of 2020. What would be the…

A: ANSWER - An increase in unemployment In theory, a rise in the savings rate should lead to an…

Q: Why are nominal wages sticky (adjust slowly) in the short run? wage contracts are made…

A: Wage or price stagflation indicates that the economy is not always running at total capacity. In the…

Q: Governments critically analyze the impact of increasing minimum wages. Increasing wages is a risky…

A: The persistent increment in the price level in the economy is termed as the inflation. The inflation…

Q: According to Friedman and Phelps, the unemployment rate is above the natural rate when actual…

A: The Philips curve is an economic model developed that shows us the negative relationship between the…

Q: A fall in the amount of inflation, given a fixed nominal interest rate will cause: Group of answer…

A: Answer- Need to find- A fall in the amount of inflation, given a fixed nominal interest rate will…

Q: Economists argue that money is neutral in: a. both the short and the long run. b. the short run…

A: please find the explanation below.

Q: Which of the following statements about prices and inflation is not​ correct?     A. The…

A: Inflation: Inflation refers to the situation of general price rise in goods and services in the…

Q: The GDP deflator is... The difference between Nominal and Real GDP. The inflation rate used to…

A: The economies around the globe are involved in various types of financial, and economic activities.…

Q: Choose the statement that does not describe Microeconomics. a. The effect of an increase in the Tax…

A: In macroeconomics, we study the decision of individual households or a group of a company or firm.…

Q: Explain why a sudden, large burst of inflation could lead to a recession?

A: Inflation is the continuous rise in the price level of commodities in a nation over a period of…

Q: What are the results when inflation decreases

A: Inflation refers to the increase in the prices of most commodities and services of daily or common…

Q: Inflation is one macroeconomic phenomenon that policy makers watch closely and intervene to bring it…

A: ANSWEE   Disinflation occurs when there is deep recession leading to a sustained fall in demand .

Q: Between 2000 and 2003 the federal government reduced the key (most important) interest rate for the…

A: Between 2000 and 2003 the federal government reduced the key (most important) interest rate for the…

Q: If the inflation rate is 2 percent and the real interest rate is 4 percent, the nominal interest…

A: In an economy, inflation and different types of interest rate such that real and nominal interest…

Q: A decrease in the price level leads to greater real wealth and more savings, which reduces the…

A: Wealth effect:- The wealth effect investigates ways personal fortune influences customer purchasing…

Q: We have talked about inflation. Consider the following question and evaluate: Do rising oil prices…

A: It is used to calculate how goods and services prices rise. Prices can increase due to increasing…

Q: Which of the following is most likely to be true if the rate of inflation rises sharply? a.…

A: Inflation refers to an increase in the general price level in an economy over a period of time. It…

Q: Use the given scenarios and the information you have learned about Fiscal and Monetary policy to…

A: Central banks use monetary policy, to increase or decrease the amount of money in the economy by…

Q: Suppose banks require a real interest rate of 12 percent. If they expect inflation to be 3 percent,…

A: A real interest rate is the one which is adjusted for the inflation whereas nominal interest rate…

Q: What sort of event could lead to a simultaneous decrease in both inflation rate and the unemployment…

A: Inflation is defined because the rate at which prices rise over time. Inflation is sometimes defined…

Q: What is the impact on inflation? Explain

A: In an economy, inflation refers to the market situation when there is a steady or a specific…

Q: Describe the fiscal and monetary measures that are normally taken to curb inflation.

A: FISCAL MEASURES 1- The two main important tool of fiscal measures are revenue an dtaxes. 2- To…

Q: Some politicians have suggested tying the minimum wage to the consumer price index (CPI). Applying…

A: The minimum wage is the government determined wage rate that the employer in the economy should pay…

Q: When an economy approaches full employment, why does demand-pull inflation become a problem?…

A: Demand-pull inflation occurs due to a rise in aggregate demand in the economy. Since it emerges from…

Q: Explain briefly the following three principles of economics by Mankiew. 1- Rational people think at…

A: The principles of economics include: There is a trade-off faced by people. The cost of something is…

Q: Which of the following is the positive impact of inflation?   A) Inflation causes the real value of…

A: Inflation is the rise in average price level of goods and services produced in the economy.

Q: What is inflation? How is it measured? Briefly discuss the factors which can cause Inflation. List…

A: Inflation: Inflation is defined as rise in the general price level of goods and services over a…

Q: Q24 The natural rate of unemployment is generally assumed to be Select one: a. the rate of…

A: In an economy natural rate of unemployment refers to the optimal level of unemployment thate occurs…

Q: Suppose that the inflation rate remains constant while output increases and the unemployment rate…

A: The aggregate supply and aggregate demand model shows the relationship between real GDP and price…

Q: Suppose that the economy is experiencing a high unemployment rate and at the same time, inflation is…

A: Stagflation is the situation where there is a higher inflation along with the lower economic growth…

Q: Suppose both nominal GDP rises by 10 percent and real GDP rise by 2 percent. What has happened to…

A: Given, Rise in nominal GDP = 10% Rise in real GDP = 2%

Q: Assuming all else equal, the following happens in the economy. “Wages have grown more slowly than…

A: Rise in labor costs means increase in cost of production. As costs of production increase, in short…

Q: Changes in the consumer price index are useful in predicting changes in the producer price index.…

A: Inflation is defined as a rise in the general prices of a predetermined basket of goods and services…

Q: which of the following is true Select one: a. When the actual rate of unemployment is low than…

A: Answer: option b (natural rate of unemployment is the rate of unemployment required to keep the…

Q: The economist A.W. Phillips published a famous article in 1958 in which he showed a   a. positive…

A: The economist A. W. Phillips published a famous article in 1958 in which he showed that there exists…

Q: Some politicians have suggested tying the minimum wage to the consumer price index. Applying the…

A: To know the effect of policy on the level of output, the price level & the employment:…