What’s worse: unemployment or inflation?This chapter reviewed the costs of unemployment and...

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What’s worse: unemployment or inflation?This chapter reviewed the costs of unemployment and inflation. Clearly, the preferred policy goal is lower unemployment and lower inflation. But sometimes policymakers need to make choices. Make certain that you have identified:All the costs of unemployment. They are: ___________________________________All the costs of inflation. They are:________________________________________Which is worse:   	a 1 percent increase in the unemployment rate, or 	a 1 percent increase in the inflation rate   Weigh the costs of each: which is more harmful?
	
Document Preview: WK #2 QUIZWhat’s worse: unemployment or inflation?This chapter reviewed the costs of unemployment and inflation. Clearly, the preferred policy goal is lower unemployment and lower inflation. But sometimes policymakers need to make choices. Make certain that you have identified:All the costs of unemployment. They are: ___________________________________All the costs of inflation. They are:________________________________________Which is worse:a 1 percent increase in the unemployment rate, ora 1 percent increase in the inflation rateWeigh the costs of each: which is more harmful?

David · Accepted Answer

The question of what is worse?; inflation or unemployment is a debatable question. There is no 
study done so far to measure what is worse: inflation or unemployment. Both are not good for 
the economy. Increasing joblessness is worse for the economy because it is underutilization of 
productive resources and deprives income to labors. Inflation has some positive impact.

What’s worse: unemployment or inflation? This chapter reviewed the costs of unemployment and inflation. Clearly, the preferred policy goal is lower unemployment and lower inflation. But sometimes...

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