3- a) What is the trade-off the governments and central banks face when dealing with inflation and unemployment? b) Explain what happens to actual inflation (relative to expected inflation) when the actual unemployment rate is either above or below the natural rate of unemployment.

Q: 9. When the effects of a more expansionary macroeconomic policy are quickly and accurately…

A: The correct statement is “when the effects of a more expansionary macroeconomic policy are quickly…

Q: The U.S. is currently experiencing high inflation. What is the medium-run explanation for this…

A: Inflation is the rise in average genral price level of basket of goods over period of time . It…

Q: 1.True or False: Businesses and government care only about long-run economic forecasts, because they…

A: Answer 1 The correct answer is option - True Reason behind the answer- Firms and governments find it…

Q: 15. During the 1960s, most economists believed that expansionary macro-policy Group of answer…

A: The correct statement is “Most economist believed that expansionary macro-policy that caused…

Q: The Jamaican government’s economic policy seems to be targeting inflation. Discuss the pros and cons…

A: Inflation targeting refers to the use of monetary policy by central banks to keep inflation near to…

Q: 4. When the actual unemployment rate is likely to fall below the natural rate of unemployment, we…

A: Unemployment is a situation in which a person who is willing and able (capable) to work do not find…

Q: Question 7 In the case of aggregate demand and aggregate supply shocks, there is no tradeoff between…

A: Meaning of Trade-Off-Theory: The term trade-off-theory states that when an investor or a firm…

Q: Which of the following describes the cause of a  sustained inflation?

A: Various causes leads to sustainable expansion.

Q: 39. Model the Phillips curve and explain what the curve means in terms of policy.

A:

Q: Explain the differences between creeping inflation and walking inflation?

A: When the rise in prices is very slow, it is termed as creeping inflation. This is also known as mild…

Q: Explain what researchers have found on the costs and benefits of inflation?

A: Inflation is defined as the increase in the prices of goods and services in the economy over a…

Q: identify and explain the economic theory about the costs and benefits of inflation?

A: The situation that depicts the general increase in the level of goods and services during a period…

Q: 24. Which of the following groups benefit from an unanticipated rise in the inflation rate ? O.…

A: When inflation rises, the higher price level reduces the real value of the debt. The borrower can…

Q: 9  Consider the AD-AS model: (a) Explain with your own words what is the Phillips Curve. (b)…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: You have the assignment of making a recommendation to the Chairman of the Fed during a   period of…

A: High inflation is rapid rise in prices of goods and services. This is usually when demand surpasses…

Q: Based on the concept of demand-pull inflation, when the economy is at, or very close to,…

A: Demand-pull inflation: When there is more demand then it will lead to an increase in the price of…

Q: The self-correcting tendency of the economy means that recessionary gaps are eventually eliminated…

A: Self correcting property of the economy means production will adjust itself in order to reach full…

Q: how does the philips curve explain trade-off between unemployment and inflation

A: Philip curve:- This curve was created by A. W. Phillips, which states that inflation and…

Q: Which of the following assumptions best characterized the assumption about how individuals formed…

A:

Q: 3. Activists and nonactivists both believe that Group of answer choices -the self-corrective…

A: Activists and nonactivists both believe that: Macro-policy should seek to minimize economic…

Q: money. How does the quantity theory of money relate to Milton Friedman’s famous statement that…

A: In classical school of economics money is demanded only for transaction purpose. Inflation is the…

Q: 5. The stock market crash has caused a great number of asset prices to drop sharply.If people’s…

A: Stock market generally crashes due to pandemic, recession, trade war, natural disaster, any…

Q: 1. Suppose short-run output is negative. Select all the correct statements: (a) The Federal Reserve…

A: In an economy, a negative output refers to the situation when there is a decrease in the output as…

Q: State whether the following are true, false, or uncertain, and provide reasons for your answers. Use…

A: Since you have asked multiple questions, we will solve the first 3 parts for you. If you want any…

Q: Find and describe an inflation contemporary issue of supply and demand into three paragraphs with…

A: Demand and supply In an economy there is always a demand for goods and services and the supply of…

Q: 1) Suppose that inflation is currently 7% and inflationary expectations are also 7%. Assume that…

A: Basics:- Actual inflation = Expected inflation + Demand pull inflation + Cost (Supply) pull…

Q: Explain the differences between creeping inflation and walking inflation

A: A continuous increase in the general price level in an economy is referred to as inflation.

Q: 16.  According to the modern view of the Phillips curve, expansionary macroeconomic policy that…

A: The correct statement is “According to the modern view of the Phillips curve (PC), expansionary…

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.