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Question 1:
"When inflation twice surged to double digit level in the mid and late seventies, American named it public enemy number one."
a) What are the main causes of inflation?
b) Explain and comment on the policy measures which might be used to combat inflation of excess demand.
Question 2:
Most economists agree that high levels of unemployment are costly not only for the individuals and their families directly affected, but also to the economy as a whole.
a) Distinguish between the economic costs arising from people out of work and the social costs that often result.
b) Suggest practical remedies to alleviate the unemployment problem both in the short run and over the longer run.
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