What is the result of the politicians who are consistently reluctant to enact policies to fight inflation? a) higher and higher government debt b) low interest rates c) falling deficits d) a decrease in the money supply What is the result of the politicians who are consistently reluctant to enact policies to fight inflation? a) higher and higher government debt b) low interest rates c) falling deficits d) a decrease in the money supply

What is the result of the politicians who are consistently reluctant to enact policies to fight inflation? a) higher and higher government debt b) low interest rates c) falling deficits d) a decrease in the money supply What is the result of the politicians who are consistently reluctant to enact policies to fight inflation? a) higher and higher government debt b) low interest rates c) falling deficits d) a decrease in the money supply

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 25CTQ: Imagine that the government statisticians who calculate the inflation rate have been updating the...

See similar textbooks

Similar questions

There is currently a political and academic controversy whether or not stimulus packagesagainst the Covid-induced economic recession will cause inflation. Professor OlivierBlanchard has warned that the stimulus package of the US-administration may lead toinflation in the US. However, he does not see inflation dangers emanating from stimulusprograms in the Eurozone. The Next Generation EU program is not only considered to be a stimulus program but also tobe a growth program, which by spending on infrastructure and climate-related investmentsis expected to lead to an increase in potential output.Analyze in an AD-AS model the impact of economic growth on actual GDP and the pricelevel. Also elaborate on the role that an additional demand stimulus could play.
Given the unpopularity of inflation, why don’t elected leaders always supportefforts to reduce inflation? Many economists believe that countries can reducethe cost of disinflation by letting their central banks make decisions aboutmonetary policy without interference from politicians. Why might this be so?
The economy begins in longcrun equilibrium. Thenone day, the president appoints a new chair of theFederal Reserve. 11\is new chainnan is well known forher view that inflation is not a major problcn1 for aneconomy.a. How would this news affect the price level thatpeople would expect to prevail?b. How would this change in the expected pricelevel affect the nonlinal wage that workers andfmn.s agree to in their new labor contracts?c. How would this change in the nonlinal wageaffect the profitability of producing goods andservia,s at any given price level?d. How docs this change in profitability affect theshort-run aggregate-supply curve?e. ff aggregate demand is held constant, how docsthis sllift in the aggregate-supply curve affect theprice level and the quantity of output produced?f. Do you think this Fed chainnan was a goodappointment?
In the long run, the government budget will add to sustained inflation if. Oa Deficits are always accompanied by decreases in the money supply. Ob. Continual deficits are financed by the continual creation of new money. Oc They require decreases in the money supply. Od Government borrowing lowers interest rates. O e The government finances the deficit by borrowing from the private sector.
options:a contractionary fiscala contractionary monetarya recessionaryan expansionary fiscalan expansionary monetary an inflationaryequal to greater thangrew inflationless thanrecededthe same asunemployment
Refer to the accompanying figure. LRAS Inflation a A 0, y' Output O O An economy is currently in long-run equilibrium at point B, at an inflation rate of m, which is too high to sustain economic growth. If an anti-inflationary policy is enacted, the economy will be in short-run equilibrium at point creating gap. O SRAS O SRAS AD' AD A; an expansionary A; a recessionary D; a recessionary D; an expansionary
Goverment should focus on a- long run growth and controling defalation b- lon run growth and controllin inflation c- short run groth and controllin deflation d short run growth and controlling inflation
Suppose the current administration decides to decreasegovernment expenditures as a means of cutting theexisting government budget deficit.a. Using a graph of aggregate demand and supply, showthe effects of such a decision on the economy in theshort run. Describe the effects on inflation and output.b. What will be the effect on the real interest rate, theinflation rate, and the output level if the FederalReserve decides to stabilize the inflation rate?
Finance Minister Enoch Godongwana announced during his budget speech that South Africans can receive up to R15,000 in tax rebates for solar panels starting from 1 March" This is an example of... O A. Fiscal policy B. Monetary policy O C. Income policy O D. Foreign trade policy
Explain whether the following stati:,,.nents arc true,false, or uncertain.a. "lnflation hurts borrowers and helps lenders,because borrowers must pay a higher rate ofintc.rcst. 1'b. "lf prices change in a way that leaves the overallprice level w,changro, then no one is made betteror worse off.''c. "Inflation docs not reduce the purdtasing powerof most workers . ''
1) Explain the trade off between inflation and output in macroeconomics. 2)Exlain why the government may/may not be able to just randomly implement policies to increase ouput.
In the basic New Keynesian model, suppose that there is an increase in government spending. • First, suppose that the central bank does nothing (accommodates the shock). Illustrate onthe graphs and explain what will be the effects on inflation and output? • Second, suppose that economy initially has inflation equal to the central bank’s inflationtarget and an output gap of zero. What action do you expect the central bank wouldundertake? Illustrate you answer on the graph and explain. PLEASE SHOW ALL HAND WRITTEN STEPS AND WORK!