1. Referring to the graph below, compare and contrast inflation in 1980 and 1990 in terms of cost-push and demand-pull (both are possible in certain circumstances). Note that the non-accelerating inflation rate of unemployment (NAIRU) is a proxy for the natural rate of unemployment. Support your explanation with the appropriate equation(s). Hint, Okun's law may be helpful here.

Instructions: lease upload a PDF of your problem set to Gradescope by 11:00 pm. ate homework will not be accepted. lease put your name and student ID at the upper right corner of the front page. eferring to the graph below, Belgium (BEL) 10 8 RATES (percent and percent/year) Unemployment ...... ....Inflation 2 1970 1980 1990 2000 2010 TIME (year) compare and contrast inflation in 1980 and 1990 in terms of cost-push and demand-pull both are possible in certain circumstances). Note that the non-accelerating inflation ate of unemployment. (NAIRU) is a proxy for the natural rate of unemployment.The Quantity Theory of Money: 7 = gM - BY Difference estimates of T, gM, and gy . 5-year moving averages. 15 10 YOY CHANGE (%) 5 0 GDP Price Deflator (M2) - (Real GDP) -5 50 60 70 80 90 00 10 20 Source: FRED / FRB. BEA & BLS TIME (year) Lecture 16 - Money, Banking, and Macro 1: R. J. Hawkins Econ 100B: Macroeconomics 32/ 36