Unemployment rate may be understated if A recession is prolo

Unemployment rate may be understated if A recession is prolonged for more than a year Disccuraged workers are not included in the survey A signification number of minimum wage rate workers da not find employment number of minimum wage rate workers do not find emplyment None of the above In8 to 10 sentences define two type of inflation. During a prosperity regime, which type of inflation rate is expected to increase and why In eight sentences or more, describe the three types of indicators as qualitative measures of forecasting. Provide at least one example fits the description. In 8 sentences or more, explain what caused what caused the Great Recession of 2008. Is it possible to avoid such a recessiion in future

Solution

Q 30 ) The option is 4

Q 31) Cost push and Demand pull inflation are the two types of inflation .

Inflation is said to be demand pull if those who buy goods and services desire to purchase goods and services greater than what the economy could produce. In other words excess demand for commodities tend to push the prices up. When there is an increase in demand , prices will tend to go up and output of goods and services would also tend to increase. However , if the economy is already at full employment , the effect of the increase in demand would only be translated through increase in prices.

Cost push inflation is the type of inflation where increases in the cost of production push prices up. This is a situation where the cost of input rather than excess demand is the major cause of inflation. The major causes of cost push inflation are demand for higher wages by labor unions , monopolies in society , devaluation of currency etc.

Cost push inflation is a rise in the price level resulting from a decrease in the aggregate supply curve while the aggregate demand curve remains fixed. As a result of cost push inflation , real output and employment decrease.

33) The Great Recession of 2008 was a period of general economic decline observed in world markets which began in December 2007 and ended in June 2009, and thus extended over 19 months. The Great Recession was related to the U.S. financial crisis of 2007–08 and subprime mortgage crisis of 2007–09. The crisis was caused by Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the mortgages; Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk; A mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis resulting in a sharp drop in international trade, rising unemployment and slumping commodity prices.