Guest Posted October 15, 2013 Report Share Posted October 15, 2013 (edited) Goad evening! I am working on my IA in macroeconomics thereby everything I write in is double checked. So I want to make something clear and would like to ask for help!The point of concern is the full employment - when there is such, what is the inflation rate? Can state it as the healthy ~2% rate, which is also the aim of the country's government I am analyzing? Edited October 15, 2013 by Guest Reply Link to post Share on other sites More sharing options...
ctrls Posted October 15, 2013 Report Share Posted October 15, 2013 The inflation rate is independent of the full employment rate, since the price level is plotted on the y-axis. You could discuss how increasing AD/ decreasing SRAS will cause inflation rate to potentially increase above what is desired, but you can't really show that it's gone/going above the desired result. Reply Link to post Share on other sites More sharing options...
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