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

Q: Describe the role of pricing during periods of inflation and recession

A: A recession is a period of an economic slowdown that continues for consecutive quarters. Recession…

Q: Can you explain how expectations about future prices and incomes will affect consumption?

A: Consumption measures the total consumption spending by the households on different goods and…

Q: Suppose the Federal Reserve begins to increase the supply of money at an increasing rate. What…

A: The money supply refers to the flow of money into the economy or the supply of money into the…

Q: Can you explain how positive and negative supply shocks affect market equilibrium in terms of price…

A: Supply shocks are unexpected events that significantly change the supply of a product or commodity,…

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 is supply side economics

A: Economics is that branch of knowledge in which we study the scarcity of resources and unlimited…

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: How do propensities and multipliers, and even expectations affect the outcomes in a downturn

A: In an economy, when talking about propensity, expectations and multipliers, these are the ratios of…

Q: What happens when the government uses it's overdraft facilities at the central bank

A: Macroeconomic monitoring will remain crucial since it affects the economy's final expansion route as…

Q: address the problem of an economic recession caused by high inflation, governments and central banks

A: An economic recession is a prolonged period of considerable fall in economic activity that often…

Q: Explain in details how high inflation can lead to a recession in several ways

A: Inflation refers to the rise in the general price level or the cost of the goods and services rises…

Q: An increase in the money supply will shift aggregate demand to the left. TRUE OR FALSE?

A: An increase in money supply decreases interest rate, which increases investment. Higher investment…

Q: How does an unanticipated decline in the price levelcause a drop in lending?

A: Moral hazard problem refers to change in the behavior of individual or firm towards the risky…

Q: why do expectations play such an important role in investment demand

A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…

Q: Why has Supply Side Economics not yielded the results envisioned by its proponents?

A: The supply-side theory is associate in economic thought whereby increasing the availability of…

Q: Explain the different push factors and discuss how they impact on FDI flows

A: Push factors are known as those factors which lead to migration from the country to due economic,…

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: Recalling Clasical, Keynesian, and now Supply side economics. How would you describe each school

A: The objective of this question is to provide a brief description of three major schools of economic…

Q: Why is inflation a macroeconomic problem? Why can't an inflation rate of 0% be achieved?

A: In an economy, macroeconomic problems refer to the economic uncertainties that affect the economy as…

Q: If the price level decreases, what will happen to the level of real GDP supplied?   It will usually…

A: Real GDP: It is used to measure the value of economic output that is adjusted for price changes.

Q: How will a change in the money supply affect aggregate demand?

A: Aggregate demand (AD) shows the relationship between total spending and the price level. Total…

Q: Why did oil prices plunge in 2014?

A: Introduction: When the supply of a commodity (oil) being much greater than can be sold or is needed…

Q: Explain how an increase in a price level will affect the demand for money and the aggregate demand.…

A: The macroeconomic equilibrium in an economy is determined by the aggregate demand and aggregate…

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: 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…