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Would the classical model of the price level be relevant if there is a great deal of unemployment in the economy and no history of inflation?
Wiki User
∙ 11y ago
No - The classical model is only realistic during periods of high inflation, because the stickiness of nominal wages and prices rise. This results in the Aggregate Supply Curve shifting left to it's next long-run equilibrium level much more quickly than during periods of low inflation.
Wiki User
∙ 11y ago
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Economic term for an economy with rising inflation and unemployment?
This is called inflation or more precisely "price inflation".
How do monetary policy control inflation?
Monetary policy can have an impact of inflation. The ideal state of the economy is a balance between inflation and unemployment at 4.3% which is only seen in a wartime economy.
What effect did Fords economic policy have of the economy?
inflation went down, but unemployment remained high
When there is high inflation in country what are the measures taken by nation govt?
Govt measures inflation status by using economic policy instrument, fiscal and monetary policy directed toward market structure and the level of unemployment rate in the economy, because inflation and unmployment are corrolated. Finaly Govt mesure unemployment through inflation and inflation through unemployment.
What happend to the economy during stagflation?
In stagflation, you have high inflation, high unemployment, and low demand.
Economic term for an economy with rising inflation and unemployment?
This is called inflation or more precisely "price inflation".
How do monetary policy control inflation?
Monetary policy can have an impact of inflation. The ideal state of the economy is a balance between inflation and unemployment at 4.3% which is only seen in a wartime economy.
What effect did Fords economic policy have of the economy?
inflation went down, but unemployment remained high
Why would unemployment in a classical economy be zero?
This may not be the answer your teacher is looking for. The classical economy has no facility to support the unemployed or unemployable. So You either work, find or grow your own food or die. No matter how you look at it, no unemployment.
When there is high inflation in country what are the measures taken by nation govt?
Govt measures inflation status by using economic policy instrument, fiscal and monetary policy directed toward market structure and the level of unemployment rate in the economy, because inflation and unmployment are corrolated. Finaly Govt mesure unemployment through inflation and inflation through unemployment.
What happend to the economy during stagflation?
In stagflation, you have high inflation, high unemployment, and low demand.
Which way does the Phillips curve slope?
The Phillips Curve is an inverse relationship between the rate of unemployment in an economy and the inflation. The lower the unemployment is, the higher inflation we get! Thus we can say that the Phillips Curve is negative (downward sloping)
What happened to economy during stagflation?
Higher rates of inflation, decrease in business productivity, high unemployment
Real GDP is not changing at all, unemployment is about 8%, and inflation is steady. Where in the business cycle is the economy?
trough
Why is the economy in Luxembourg so good?
luxembourg's stable, high-income economy features moderate growth, low inflation, and low unemployment.
What happened to the economy during stagflation?
Higher rates of inflation, decrease in business productivity, high unemployment
Which is an illustration of a macroeconomic question?
the relation of inflation and unemployment can be macroeconomic illustration. both these topics deals with macro economy.
