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When inflation occurs some economic agents gain and some lose. Who would gain and lose if inflation occurs? Why? What will happen to interest rates
- When inflation occurs some economic agents gain and some lose. Who would gain and lose if inflation occurs? Why? What will happen to interest rates and investment according to Keynesian and Classical theories?
- Is inflation still a possible threat? What could cause a rise in inflation? Is higher inflation desired? Suggest some possible scenarios.
- Can disinflation or deflation occur without recession? Who would gain and lose if disinflation occurs? Can disinflation be beneficial?
- Will deflation worsen a recession or shorten it? Will a high unemployment rate cause deflation?
- Should the Federal Reserve do anything to prevent deflation? What policies do you recommend the Fed follow?
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