Macroeconomics - 1.1960’s economy 2 What government did 3...

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Macroeconomics Pat Nerney, Sal Esposito, Caitlyn Joyce Inflation I. Basics of inflation 1. refers to a general rise in prices 2. used to refer to an increase in the money supply, which is now referred to as expansionary monetary policy. 3. is measured by comparing two sets of goods at two points in time, and computing the increase in cost not reflected by an increase in quality. 4. in modern mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates II. How inflation occurs in the economy
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Unformatted text preview: 1.1960’s economy 2. What government did 3. How they handle recession III. Ongoing inflation ````````1. What the government desires 2. Philips Curve(A lot) IV. Why we allow ongoing inflation 1.CPI 2.Labor Market works more smoothly 3. tolerable is ok V. Problems of Inflation 1.Fixed income recipients suffer 2. Unions can demand higher wages which can hurt nation 3. If inflation rises in other countries exports and imports present themselves differently in different areas of the world which can create deficit...
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