Homework Help: Economics

Posted by Dee on Tuesday, April 29, 2008 at 3:43pm.

Suppose last month's inflation report estimated monthly inflation to be 0.4% over the month. The monetary authorities want inflation to not exceed 2% per year. Estimates of potential output state that our economy is currently near potential output. Unemployment rates have been stable at around 5%, but these rates have been rising slightly in the past months. Give a brief summary of what policy makers might be concerned about and suggest what you might do about it, if anything at all. Support your recommendations with analysis using the AS/AD model to illustrate your points.

Economics - economyst, Wednesday, April 30, 2008 at 8:42am
Draw your AS and AD graph. To lower prices and raise output, you would want the supply curve to shift outward. What government policies could do this? Take a shot.

Answer this Question

Related Questions

calculus - The US inflation rate had been 3.5 % per year and the Argentinian ...
economics - which of the following statements about inflation are true? check ...
social studies - Treasury inflation protection bonds pay: fixed interest plus an...
Economics - “Many countries peg their own currencies to the greenback; ...
microeconomic - How might an investor who holds a regular 10-year Treasure note ...
Economics - 9. During the 1990's the inflation and unemployment trends in ...
Economics - The formula given was: (real rate of interest) = (nominal rate of ...
economics today - Suppose the economy has been experiencing zero inflation and ...
Macroeconomics - Say you have a 15% inflation rate and a 10% unemployment rate, ...
algebra 2 - When inflation causes the price of an item to increase the new cost ...

For Further Reading

First Name:
School Subject:
Answer: