Author Question: Inflation that is caused by an increase in aggregate demand without any change in aggregate supply ... (Read 115 times)

jake

  • Hero Member
  • *****
  • Posts: 538
Inflation that is caused by an increase in aggregate demand without any change in aggregate supply is called
 
  A) demand-push inflation. B) cost-pull inflation.
  C) cost-push inflation. D) demand-pull inflation.

Question 2

What is the Phillips curve? What does the Phillips curve suggest about optimal policy?
 
  What will be an ideal response?



EAN94

  • Sr. Member
  • ****
  • Posts: 307
Answer to Question 1

D

Answer to Question 2

The Phillips curve shows a trade-off between unemployment and inflation. With the unemployment rate on the horizontal axis and inflation on the vertical, the Phillips curve is pictured as a downward sloping curve. If the curve is a suitable representation of the economy, in the short run policy makers can choose the combination of inflation and unemployment that they want.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

It is important to read food labels and choose foods with low cholesterol and saturated trans fat. You should limit saturated fat to no higher than 6% of daily calories.

Did you know?

Though methadone is often used to treat dependency on other opioids, the drug itself can be abused. Crushing or snorting methadone can achieve the opiate "rush" desired by addicts. Improper use such as these can lead to a dangerous dependency on methadone. This drug now accounts for nearly one-third of opioid-related deaths.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

For a complete list of videos, visit our video library