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GalinKa [24]
2 years ago
12

After a prolonged period of high inflation the government of Atlantia decides to set a target of 0% inflation going forward. As

the new assistant economic minister, you are tasked with critiquing this policy. Which criticism of the 0% inflation target is best supported by the economic literature
Business
1 answer:
s2008m [1.1K]2 years ago
6 0

The best support against a 0% inflation target given by the economic literature is c. A 0% inflation target could lead to deflation.

<h3>Why is a 0% inflation target risky?</h3>

If 0% inflation is targeted, the policy might be so effective that inflation becomes negative and deflation happens.

When deflation happens, the economy will experience hardships with lower production levels that will impact other sectors of the economy.

Options for this question include:

a. It is undisputed that too little inflation interferes with the downward adjustment of real wages.

b. Moderate to high inflation is popular among consumers.

c. A 0% inflation target could lead to deflation

Find out more on deflation at brainly.com/question/13562161.

#SPJ12

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Answer:

The US dollar is worth more value than INR.

Explanation:

The US dollar is worth more value than INR under flexible exchange rate system, quantity of dollar supplied exeed the quantity of dollar demanded. There are multiple factors which affect the valuation of currency. One of the factor is purchasing power parity, as it show the strength of domestic economy. Inflation is another factor affecting the currency of the nation, higher inflation rate lead the value of currency go down.

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Briefly define and give a specific example of:A.1.Scale economies in connection with urban economics (i.e., related to land use,
Shtirlitz [24]

Answer:

Explanation:

.1.Scale economies in connection with urban economics (i.e., related to land use,housing, or firm location)A.2.Pecuniary agglomeration economiesA.3.Technological agglomeration economiesA.4.Retail agglomeration economiesA.5.ExternalitiesA.6.ceteris paribus assumptionA.7.A numeraire goodA.8.An efficient allocation of resources

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3 years ago
A government deficit has increased from 30 to 50. The country's trade deficit is 100 and private savings equal 65 and investment
viva [34]

Answer:

If Ricardian neutrality holds true, after this change in the government's budget, private savings will equal 40.

Explanation:

S - I = X - M, where

S = Sp + Sg, where

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Initially,

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