Econ Notes

Econ Notes - In 1970s many countries experienced high...

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Econ Notes 11/29/11 Good intentions are no substitute for sound policies Big debate: is it government causes or market caused? For Keynesians inflation is only a concern if above full employment Keynesian trade off- unemployment and inflation, expansionary = high unemployment and restrictive = higher levels of inflation
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Unformatted text preview: In 1970s many countries experienced high levels of inflation and unemployment and it was known as stagflation, theories based on Phillips curve suggested this could not happen Misery index = inflation rate + unemployment rate MV=PY (nominal GDP)...
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