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on that one how it gave u stats about an unknown economy, unemplyment rate and inflation rate, some people are saying the inflation rate was lowering, i didnt really concentrate, but i wrote it was rising along with the unemployment rate, whcih is a rare sitatuin called 'stagflation' am i wrong?
 

Stilla

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You're not wrong, but i hope you wrote more than that.
 
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uh oh...inflation lowering? i wrote about stagflation too >__<

are we both wrong? lol
 

Rorix

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inflation was rising slightly but it was far outstripped by the growth in unemployment, what they wanted you to get at was a Phillips curve relationship in that inflation was low and unemployment was high, and then some extra information - whatever turns you on here. I think I talked about the high unemployment meaning subdued wage demands reducing cost push inflation, and the result of the subdued wages growth meaning little or no growth in consumer expenditure, reducing demand-pull inflationary measures. or something like that.
 

Rorix

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the CPI went from 100 to 102 to 103 if i recall
so the inflation rate had fallen in the 3rd year but there wasn't any deflation


anyway, Phillips curve is what they're getting at
 
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yeh nah i wrote more than that i just wanted to make sure people agreed with me, i know im right because phillips curve means when unemployment rises inflation DROPS which means it would not even rise .4 % or wateva, so nah phillips curve aint wat they gettin at, specailly since they used that one in mulitple choice already, stagflation is a rare occurence that happened in 70's and once in the 90's, they would want to test if you've been studying everything
 

bakerlog

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mushroom_head said:
i think what was meant by inflation lowering is that in year 2 it was 2% whereas in year 3 it was 0.98%
i agree!

hip do u know how to calculate the CPI? cause it didnt rise
 

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I wrote this in the other thread but here we go again. The inflation rate was DECREASING. The CPI was increasing but the rate of inflation was not - you can't count the increase from Year 1 - Year 2 as an increase because Year 1 inflation is always 0 because it's the base year. So you get Year 1 - Year 2 figure, then Year 2 - Year 3, and since Year 2 - Year 3 is a lower inflation rate, it's obviously decreasing. Thus, there's an inverse relationship since unemployment increases by 5% each year.
 

skypryn

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Rorix said:
the CPI went from 100 to 102 to 103 if i recall
so the inflation rate had fallen in the 3rd year but there wasn't any deflation


anyway, Phillips curve is what they're getting at
yes and obviously inflation can fall without deflating ie. the phillip's curve doesn't usually go into the deflation zone. thus stagflation is wrong
 

phungus

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mushroom_head said:
i think what was meant by inflation lowering is that in year 2 it was 2% whereas in year 3 it was 0.98%
hehe yeh that's also wat i got. Definately not stagflation i hope
 

matt_f64

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haha ur all wrong about stagflation.... the CPI was rising, this doesnt mean inflation was rising... cos the inflation RATE in year 2 was 2% and in year 3 it was 1% therefore inflation is falling..
 
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lol shit thats wat i get for being lazy, i knew if i shoulda bothered calculating the CPI, i just looked at it and though hm its rising...

but now i actually calculated it, its lowering, oh well i dont care they'll still give me some marks

killed the rest of the short answer so who gives a shit lol
 

ematouk

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mushroom_head said:
i think what was meant by inflation lowering is that in year 2 it was 2% whereas in year 3 it was 0.98%

This guy is absolutely correct. Inflation is lowering and unemployment is increasing... this shows an inverse relationship between unemployment and inflation according to the appearance of the phillips curve.
 

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Yeah... thats what i got... in year 2 inflation was 2% and in year 3 it was 0.98%... therefore inflation falling and unemployment increasing so i talked about phillips curve... LOL i actually drew a little phillips curve next to my answer... ahaha
 

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