The price level of inflation rate of the economy

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Reference no: EM131094644

Explain in words and graphs what is likely to happen to the price level of inflation rate of the economy if the following events occur:

A) nominal wages rise by 2% while labor productivity rises by 4 % over the year

B) the economy is operating at near capacity and the central bank decides to increase its purchase of bonds.

C) the economy is full employment and the gov decides to raise taxes without increasing spending

D) the central bank responds to high inflation by issuing increasing amounts of money so that business can purchase essential supplies with low interest rates.

Reference no: EM131094644

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