Figure shows that the inflation rate and the money growth rate increased on trend until about 1980, and then decreased. What happened to the variability in the inflation rate and the variability in the money growth rate in the post-1980 period, relative to the pre-1980 period? Provide an explanation for this phenomenon.
Answer to relevant QuestionsFrom Figures, determine and discuss how fluctuations in the nominal interest rate and inflation have contributed to fluctuations in the real interest rate from 2000 to 2012. Assume an economy where there are two producers: a wheat producer and a bread producer. In a given year, the wheat producer grows 30 million bushels of wheat of which 25 million bushels are sold to the bread producer at $3 ...In this chapter, we learned that the quantity of U.S. currency outstanding was $3,490 in March 2012. Suppose that we were to try to use this number to estimate the amount of output produced in the underground economy in the ...Average labor productivity tends to be a coincident variable. Examine Figure 3.16 carefully. During the 1991–1992, 2001, and 2008–2009 recessions, how do you observe average labor productivity behaving relative to GDP? ...Suppose that the representative consumer’s dividend income increases, and his or her wage rate falls at the same time. Determine the effects on consumption and labor supply, and explain your results in terms of income and ...
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