Unemployment and Inflation

Topics: Money, Inflation, Economics Pages: 2 (482 words) Published: December 4, 2012
"Unemployment and Inflation" Please respond to the following:

• Predict whether the years following the next presidential election will bring us inflation, deflation, or relatively stable prices. Provide support for your response. I believe the prices will relatively remain stable, but overtime there will be inflation, and this is to pay for government funded programs and to pay for the offset costs associated with new laws and regulations governing healthcare. With the current fiscal cliff approaching some wonder will a deflation occur, if this happens then recession will then more likely occur, and this is due to the private sector being discouraged from making long-term commitments, that could fuel job growth and increase the economic recovery, which has been increasing at a rate of 2 percent over the past two years.

• Analyze how inflation could occur in a society that relies exclusively on barter versus money. Speculate what form inflation would take and how you would recognize it. Provide support for your response.

Inflation would occur due to economic growth, and in order for it to be sustained, increasing productivity must be matched by an increase in demand for the products being bartered. The market type barter society would be unable to generate this increase without establishing some type of momentary system, aside of bartering.

Anticipated inflation would be the type of inflation to occur, because in the barter type society if there is more than one person bartering or selling the same product, therefore creating the increase in competition and then driving up the price or the bartering amount would increase causing inflation within the economy.

"Economic Growth" Please respond to the following:

• Take a stand on whether or not economic growth really makes people better off in the long term. Provide support for your response. There are benefits to economic growth, like lower unemployment, better education,...
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