Question
Originally fueled by the Covid pandemic, the current economy is one of the most perplexing ones we've seen in decades. Furthermore, the measures that the
Originally fueled by the Covid pandemic, the current economy is one of the most perplexing ones we've seen in decades. Furthermore, the measures that the government could take to address the issues at hand will not clearly solve the problems. I'd like you to discuss the "Covid economy" in the following questions.
a.Inflation is one of the most pressing issues in the economyright now.
1) Explain the difference between demand-pull and cost-push inflation (you do not have to show graphs). Which of these types isprimarilyfueling the current inflation? Explainyour choice in detail.
2) Since we've discussed inflation in class, two announcements have come out: the third quarter inflation rate and what the Fed did with interest rates during their November 1-2 meeting. Tell me what happened in both of these instances, citingone sourcefor each. Explain in detail how the Fed'smanipulationof interest rates affectsinflation.
b. While we've seen inflation like this back in the 1970s, the labor market is like one we've never seen.
1) Explain what the main issue istoday anddiscusstwo reasons for thesecircumstances. Find and briefly discuss one credible article for each of your reasons.
2) Is the unemploymentrateorthelabor force participation rate a more informative indicator of today's labor market? Explain your answer.
c. Is the economy in a recession? The answer to this question is not clear-cut.
1)The mainindicatorused to gauge whether we are in arecessionis GDP.Since we discussed this topic in class,third-quarter GDPnumbershavecome out. HasGDPdecreased, stayed the same, or increased?(cite your source)What does this say about whether the economy is currently in a recession? Explain.
2) Find one crediblesourceand state whether the author/authors believe we are in or will be in a recession soon.Explain their reasoning.
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