https://www.wsj.com/articles/how-inflation-threatens-the-recovery-11626876000

https://www.wsj.com/articles/pandemic-rewrites-ceo-rulebookputting-reliability-before-efficiency-11635779679?mod=djem10point

For questions 1-3 use the articles.

1. Describe the two types of inflation. How are the housing and auto sectors adapting to the supply shock? And why are these higher prices better for producers?

2. Why are American businesses moving production back home and becoming less reliant on outsourcing? Use two examples from the article.

3. Use economic terms to explain how the supply shock is/will affect the American economy. Do you think this may be better in the long-run? What do you think are the potential downsides of reducing American investment abroad?

4. Assuming flexible exchange rates between the United Kingdom and the U.S., indicate whether each of the following would cause the US dollar to appreciate or depreciate, other things equal. Draw the effect of each on the market for US dollars for British pounds. a. The U.S. unilaterally reduces tariffs on British made products. b. The United Kingdom encounters severe inflation. c. Deteriorating political relations reduce American tourism to England. d. The U.S. savings accounts yield high interest rates relative to savings accounts in the UK.

5. Would the following groups benefit if the US dollar appreciated? Yes or No. Explain. a. Dutch pension funds holding US government bonds. b. US manufacturing industries. c. Australian tourists planning a trip to the US. d. An American firm trying to purchase property overseas. e. American tourists planning a trip to London.