P1.6 Feedback systems do not always involve negative feedback. Economic inflation, which is evidenced by continually rising prices, is a positive feedback system. A positive feedback control system, as shown in Figure P1.6, adds the feedback signal to the input signal, and the resulting signal is used as the input to the process. A simple model of the price–wage inflationary spiral is shown in Figure P1.6. Add additional feedback loops, such as legislative control or control of the tax rate, to stabilize the system. It is assumed that an increase in workers’ salaries, after some time delay, results in an increase in prices. Under what conditions could prices be stabilized by falsifying or delaying the availability of cost-of-living data? How would a national wage and price economic guideline program affect the feedback system?

Process Initial Actual wages + Prices wages Industry Automatic Wage cost of living increase K Cost of increase living FIGURE P1.6 Positive feedback.