The government's role is to prevent unemployment and prevent inflation at the same time. ● If the government focuses too much on preventing inflation and slows down the economy, we will have unemployment. If the government focuses too much on limiting unemployment and overheats the economy, we will have inflation. Severity Unemployment 6% or less 6.5-8% 8.5% or more 1-4% 5-8% Inflation 9% or more GDP Growth 2.5-5% 1-2% .5% or less

The government's role is to prevent unemployment and prevent inflation at the same time. ● If the government focuses too much on preventing inflation and slows down the economy, we will have unemployment. If the government focuses too much on limiting unemployment and overheats the economy, we will have inflation. Severity Unemployment 6% or less 6.5-8% 8.5% or more 1-4% 5-8% Inflation 9% or more GDP Growth 2.5-5% 1-2% .5% or less

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Unemployment And Inflation

Section: Chapter Questions

Problem 4.10P

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Similar questions

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