Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 14

Explain how an increase in your nominal income and a decrease in your real income might occur simultaneously. Who loses from inflation Who loses from unemployment If you had to choose between ( a ) full employment with a 6 percent annual rate of inflation and ( b ) price stability with an 8 percent unemployment rate, which would you choose Why