1. Complete the following chart. (16 Marks) Situation Inflation is running at the high rate of...

 

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1. Complete the following chart. (16 Marks) Situation Inflation is running at the high rate of 12 percent and is rising. Business investment is falling rapidly and inventories are piling up. Business confidence in the future is at all-time low. Unemployment is high at 13 percent and is increasing. Retail sales are expanding at a rapid rate. Inventories are decreasing and investment is increasing. Consumer confidence is high. Economists predict rising inflation. Is aggregate demand increasing or decreasing? Should taxes increase or decrease? Should government spending increase or decrease? What would be the effect on the government budget? (surplus or deficit) 1. Complete the following chart. (16 Marks) Situation Inflation is running at the high rate of 12 percent and is rising. Business investment is falling rapidly and inventories are piling up. Business confidence in the future is at all-time low. Unemployment is high at 13 percent and is increasing. Retail sales are expanding at a rapid rate. Inventories are decreasing and investment is increasing. Consumer confidence is high. Economists predict rising inflation. Is aggregate demand increasing or decreasing? Should taxes increase or decrease? Should government spending increase or decrease? What would be the effect on the government budget? (surplus or deficit)

Answer rating: 100% (QA)

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