Determining the annually balanced budget

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Questions a, b, and c must be at least one paragraph each 

A.) Assume the following information is relevant for an advanced economy over a three-year period. Describe in detail the macroeconomic situation faced by this society. Is cost-push inflation evident? What corrective policies would you recommend and why?

Year

Increase in Price Index

Increase in Labor Productivity

Industrial Production

Average Unemployment Rate

Hourly Wage

1

167

4%

4%

4.5%

$6.00

2

174

3%

2%

5.2%

$6.50

3

181

2.5%

1.5%

5.8%

$7.10

B.) What contributed to stagflation's demise between 1982 and 1989? How did these events affect aggregate supply and the Phillips Curve?

C.) Compare and contrast the three budget philosophies: annually balanced budget, cyclically balanced budget, and functional finance.

Reference no: EM131415971

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