What impact would this have on aggregate supply and demand

Reference no: EM131314608

1. Evaluate the following statement: In the short run, if an economy experiences inflation of 10 percent, the cause of the inflation is unimportant. Whatever the cause, the only important issue the government needs to be concerned with is the 10 percent increase in the price level.

2. [Related to the Economics in Practice on p. 258] A monthly survey conducted by Torcuato Di Tella University in Buenos Aires showed that in August 2010, people in Argentina expected inflation to increase 25 percent over the next 12 months, a similar response to the previous month's survey. This shows a large discrepancy between inflation expectations and the Argentine Central Bank's monthly index of consumer prices which showed prices rising at an annual rate of 11.2 percent, the highest level in 4 years. Use aggregate supply and demand curves to show the effect of these expectations of inflation on the Argentine economy, assuming firms increase prices in response to the expectations. What can the Argentine Central Bank do to try to lower the expectations to their projected inflation level of 11.2 percent? What impact would this have on the aggregate supply and demand curves?

Reference no: EM131314608

Questions Cloud

Explain the ea component presented as part of the case study : Discuss the EA component(s) presented as part of the case study: integration of IT good and services, the governance of IT good and services, securing the enterprise, IT strategy, ITIL, BYOB.

How the issue of white collar crime is presented in the flim : Discuss how the issue of white collar crime is presented in the film. Do not give a scene-by-scene description of what happened in the movie. Who starred or appeared in the film (i.e.: the movie stars) or who directed the movie is not important.

Determine the capillary rise for a water air glass interface : Determine the difference in pressure between the inside and outside of a soap film bubble at 20 °C if the diameter of the bubble is 4 mm.

Determine the diameter of the glass tube : Determine the diameter of the glass tube necessary to keep the capillary-height change of water at 30°C less than 1 mm.

What impact would this have on aggregate supply and demand : Evaluate the following statement: In the short run, if an economy experiences inflation of 10 percent, the cause of the inflation is unimportant. Whatever the cause, the only important issue the government needs to be concerned with is the 10 perc..

Elaborate on the steps you will take to improve your skills : Elaborate on the steps you will take to improve your critical-thinking skills to help you advance academically. Use the critical thinking information you explored in GEN/201.

Estimate the altitude of the airplane above sea level : On a certain day the barometric pressure at sea level is 30.1 in. Hg, and the temperature is 70°F.- Estimate as accurately as possible the altitude of the airplane above sea level.

Fulfill project-manning requirements : Does one functional department shall be allow to "borrow" (on a short-term basis) people from another functional department in order to fulfill project-manning requirements?

Estimate the altitude of the airplane above sea level : On a certain day the barometric pressure at sea level is 30.1 in. Hg, and the temperature is 708F.- Estimate as accurately as possible the altitude of the airplane above sea level.

User Account

All Pages