DQ__Introduction_to_Macroeconomics - 4 Inflation is...

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Introduction to Macroeconomics 1. What is meant by in the aggregate we should know that, Value of production = expenditures on production = cost of production = income? 2. In the simple Keynesian, AE = C + I and at equilibrium Y = AE , What is the role of autonomous spending? What is the role of the multiplier? 3. Over time when we measure production, why do we adjust for inflation? Should we also adjust for change in quality, change in composition of output, productivity of resources, production of externalities, and for social indicators?
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Unformatted text preview: 4. Inflation is considered to be “bad” but if prices rise, doesn’t someone receive higher income and collecting the higher prices from the buyers? Why is inflation considered bad? 5. Describe how unemployment can be a “good thing”. Is there such a thing as “god unemployment”? Do we expect 100 percent of the labor force to be working when the nation is producing the full employment level of output?...
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