Why governments want to avoid deflation

Reference no: EM132927007

(1) What factors cause inflation?

(2) Why there is no unemployment - inflation trade-off in the long-run?

(3) Why governments want to avoid deflation?

(4) Use the macro-economic equilibrium diagram to show that both government spending and tax cuts increase total expenditure. In the light of the latter discuss whether the form of fiscal stimulus matters to the aggregate economy

Reference no: EM132927007

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