What explanations can you give for the increase in both unemployment and inflation in the 1970s?
Answer to relevant QuestionsWhat is meant by hysteresis when applied to unemployment? How do you account for this phenomenon in the 1980s?How can the interaction of the multiplier and the accelerator explain cyclical fluctuations in national income?What were the causes of the credit crunch and the banking crisis of 2008?Explain how financial crowding out can reduce the effectiveness of fiscal policy. What determines the magnitude of crowding out?What factors determine the effectiveness of discretionary fiscal policy?
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