Use two graphs in the AD-AS framework to compare and contrast demand-pull and cost-push inflation. How do their causes differ? How do the outcomes (inflation, output, employment) differ?

Q: When the economy approaches full employment, why does demand-pull inflation become a problem?

A: Demand-pull inflation is the upward tension on costs that follows a lack in supply, a condition that…

Q: Why are we typically more concerned with unanticipated inflation than we are with fully anticipated…

A: A rate of inflation that is expected by the market participants in the economy is anticipated…

Q: Explain why a sudden, large burst of inflation could lead to a recession?

A: Inflation is the continuous rise in the price level of commodities in a nation over a period of…

Q: what are the major reasons of hyper inflation?

A: Inflation refers to the general rise in the aggregate price level. Thee are various types of…

Q: What could be a real world example that explains the difference between inflation and deflation?

A: Inflation refers to a rise in the general price level in an economy whereas deflation refers to a…

Q: What are the results when inflation decreases

A: Inflation refers to the increase in the prices of most commodities and services of daily or common…

Q: Discuss the short-run tradeoff between inflation and unemployment.

A: In short-run inflation and unemployment are negatively related while in the long run, these are…

Q: Why is inflation a macroeconomic problem? Why can't an inflation rate of 0% be achieved?

A: In an economy, macroeconomic problems refer to the economic uncertainties that affect the economy as…

Q: If actual inflation exceeds anticipated inflation, who will lose purchasing power and who will gain?…

A: Actual inflation is the rate of inflation measured by the consumer price index and it is unexpected,…

Q: In every election year, politicians sing their own praises of having stabilized prices through the…

A: Persistent rise in prices of goods and services leafs to inflation. When aggregate demand exceeds…

Q: aggregate demand and aggregate supply

A: The aggregate demand (AD) curve represents the total quantity of goods and services demanded in the…

Q: How does demand-pull inflation differ from cost-push inflation?

A: The inflation is an abnormal increase in the general price level in the economy. The price will…

Q: Explain the two causes of inflation

A: Inflation is the increase in the general price level of the economy.  It is not considered good for…

Q: What can be used to reduce aggregate demand and thereby control demand pull inflation? One word

A: According to the given question Demand pull inflation is basically known as inflation which…

Q: What can be a reason why inflation is not occuring when government spending increases in an economy?

A: inflation refers to the sustained rise in the general price level. It is the general rise in the…

Q: When an economy approaches full employment, why does demand-pull inflation become a problem?…

A: Demand-pull inflation occurs due to a rise in aggregate demand in the economy. Since it emerges from…

Q: Define Inflation. Explain why inflation is a macroeconomic concern

A: Inflation is caused due to increase in the money supply.

Q: Which is the correct order once the AD or SRAS has shifted to start the inflation process? a.…

A: A shift of the AD or SRAS has shifted to start the inflation implies a rightward shift of the…

Q: Give two specific reasons why inflation in Canada is higher than normal.

A: A microeconomic phenomena known as inflation describes the sharp and sudden rise in the cost of…

Q: Define inflation. Explain why inflations needs to be managed

A: The economics as a study is a vast area of study which is based upon the basic idea of scarcity of…

Q: Why do workers, firms, banks and investors in macroeconomics care about the future rate of…

A: Inflation refers to persistent rise in prices. Inflation erodes the purchasing power. Due to…

Q: Explain three implications of increasing inflation.

A: Inflation is known as an increase in prices across the board for goods and services. Because…

Q: How can demand-pull inflation lead to cost-push inflation?

A: The demand-pull inflation is a concept when there is an increase in the price level of the final…

Q: Starting from a zero rate of inflation, suppose some event decreases aggregate demand. Use flow…

A: The wage-price spiral, also known as the price-wage spiral, is an economic phenomenon that occurs…

Q: Suppose that government decides to support the firms for their investments in research and the…

A: Answer- Given in the question - Suppose that government decides to support the firms for their…

Q: What unique factors in the 1970s era caused widespread inflation?

A: According to the Phillips curve , there exists an inverse relationship between inflation and…

Q: Consider the nature of unemployment and inflation and predict whether or not they should have some…

A: Inflation is the term used to describe price increases for almost all goods and services in the…