federal government’s fiscal policy

Distinguish between the short-run and the long-run in a macroeconomic analysis.

Unemployment and inflation are an economy’s two most important macroeconomic issues. The federal government’s fiscal policy and the Federal Reserve’s monetary policy try to maintain both a low unemployment rate around a natural rate and a low inflation rate around 2%. 1. Evaluate the historical relationship between unemployment and inflation. (hint: You may start from […]

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