CO SCI 136 Lecture Notes - Lecture 13: Corporate Tax, Nairu, Stagflation
Document Summary
At the end of this lecture, the student . Is able to distinguish, define and recognize inflation, disinflation and deflation. Is able to explain the relationship between unemployment and inflation as depicted by the srpc. Is able to describe which mechanism leads to accelerating inflation. Is able to explain what nairu is and what its significance is, in the context of accelerating inflation. Is able to explain the mechanism through which hyper inflation occurs. Is able to describe the mechanism that leads to inflation tax. Is able to recognize a scenario which leads to stagflation. ". Inflation: increase in aggregated price level [real value of money decreases] Deflation: decrease in aggregated price level [real value of money increases] Typically: inflation is based on cpi (market basket consumed by citizen) It is only a model and does not describe real citizens behaviour (taking the whole economy in. With your current understanding, try to answer the following questions: