What is meant by hysteresis when applied to unemployment? How do you account for this phenomenon in the 1980s?
Answer to relevant QuestionsWhat will cause people to expect higher rates of inflation? How will expectations of inflation affect the actual rate of inflation?Why is it difficult to predict the size of the accelerator?If the government reduces the size of its public-sector net cash requirement, why might the money supply nevertheless increase more rapidly?What determines the shape of the IS and LM curves?Why is it difficult to use fiscal policy to ‘fine tune’ the economy?
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