Principles Of Economics, Student Value Edition Plus Mylab Economics With Pearson Etext -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134419381
Author: CASE
Publisher: PEARSON
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Chapter 20, Problem 1.3P
To determine
Changes in output and
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Since 1950, expansions in the United States have become ________, while recessions have become ________. longer; longer shorter; shorter shorter; longer longer; shorter
Suppose that the government believes the economy is not producing goods and services at its optimal level. In an attempt to stimulate the economy, the government increases the quantity of money in the economy by printing more money.
This monetary policy the economy's demand for goods and services, leading to product prices. In the short run, the change in prices induces firms to produce goods and services. This, in turn, leads to a level of unemployment.
In other words, the economy faces a trade-off between inflation and unemployment: Higher inflation leads to unemployment.
describe what happens when firms and workers underestimate future prices in the economy. what would happen to actual output as opposed to the expected potential output.
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Principles Of Economics, Student Value Edition Plus Mylab Economics With Pearson Etext -- Access Card Package (12th Edition)
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