Question: Explain how an increase in your nominal income and a decrease in your real income might occur simultaneously. Who loses from inflation? Who loses from

Explain how an increase in your nominal income and a decrease in your real income might occur simultaneously. Who loses from inflation? Who loses from unemployment? If you had to choose between

(a) Full employment with a 6 percent annual rate of inflation

(b) Price stability with an 8 percent unemployment rate, which would you choose? Why?

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