Describe how stimulation could trigger runaway inflation

Reference no: EM13183494

those polices were predicated on 1930s Keynesian assumptions that economic recoveries always run out of steam and at certain points need artificial stimulation of demand and fine-tuning to keep them running at acceptable levels .The evidince of the 1970s and beyond is that whenever governments stepped in to admisiter stimulate medicine , they triggered runaway inflation which finally had to be stopped with strong ,painful doses of recession..

a-whaty do Keynesian recommend for artificial stimulation of demand ?

b- Describe how such stimulation could trigger runaway inflation ?

c-Explain why stopping this inflation requiers a recession ?

d-What alternative policy might possible?

Reference no: EM13183494

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