Based on the concept of demand-pull inflation, when the economy is at, or very close to, full-employment demand-pull inflation will occur as resources for producing become more scarce.  Demand-pull inflation is the cost of achieving full-employment in the economy.  Would you prefer to experience demand-pull inflation with a high GDP, or very low inflation and low GDP?  Why?  Which do you believe is worse - unemployment or inflation?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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Based on the concept of demand-pull inflation, when the economy is at, or very close to, full-employment demand-pull inflation will occur as resources for producing become more scarce.  Demand-pull inflation is the cost of achieving full-employment in the economy.  Would you prefer to experience demand-pull inflation with a high GDP, or very low inflation and low GDP?  Why?  Which do you believe is worse - unemployment or inflation?

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