The government's role is to prevent unemployment and prevent inflation at the same time. ● If the government focuses too much on preventing inflation and slows down the economy, we will have unemployment. If the government focuses too much on limiting unemployment and overheats the economy, we will have inflation. Severity Unemployment 6% or less 6.5-8% 8.5% or more 1-4% 5-8% Inflation 9% or more GDP Growth 2.5-5% 1-2% .5% or less

The government's role is to prevent unemployment and prevent inflation at the same time. ● If the government focuses too much on preventing inflation and slows down the economy, we will have unemployment. If the government focuses too much on limiting unemployment and overheats the economy, we will have inflation. Severity Unemployment 6% or less 6.5-8% 8.5% or more 1-4% 5-8% Inflation 9% or more GDP Growth 2.5-5% 1-2% .5% or less

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following data for a particular country. Real GDP per Capita, Year 1 Population, Year 1 and Year 2 $37,500 400 million Inflation Rate 4 percent Instructions: In part a, enter your answer as a whole number. In part b, round your answer to 2 decimal places. a. What is real GDP per capita in year 2? Growth Rate of Real GDP, Year 1 to Year 2 6 percent b. What is real GDP in year 2? trillion
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