Low Inflation - Questions for Further Study

QUESTIONS FOR FURTHER STUDY

1. Chile experienced hyperinflation in 2005. What was the inflation rate? What caused Chile’s hyperinflation?

2. Go to the web site for the Bureau of Labor Statistics (www.bls.gov) to find historical U.S. inflation data. Is there a correlation between high inflation rates of inflation and U.S. involvement is wars? What explanation does economic theory provided for this correlation?

3. Stagflation is the economic condition of having relatively high unemployment and inflation at the same time.
(a) Since cyclical unemployment is caused by insufficient aggregate demand and demand-pull inflation is caused by excessive aggregate demand, how is it possible to have stagflation?
(b) What remedies might you suggest for stagflation?
(c) Which is the greater concern: high unemployment or high inflation?
(d) When has the U.S. economy experienced stagflation? What were its causes? How was it remedied?

What is Economics? - Questions for Further Study

1. What other traditions exist in the allocation of resources and products? Can you determine the practical motivations for the development of these traditions?

2. Input-output tables were important components of economic allocation in the former Soviet-Union. What were these tables? How were they developed and used? How successful was this system?

3. The Gini coefficient is used to describe the distribution of income in a society. How does the Gini coefficient for the United States compare with that of other countries? Does the distribution of income in other countries seem more or less fair than in the U.S.? Does your opinion depend on where you are in the distribution? How has the Gini coefficient for the United States changed in recent years?

4. Who were the entrepreneurs that developed the following products? Did they become wealthy?
a. microwave popcorn
b. disposable diapers
c. Chia (R) pets

5. What other successful products have been invented in your lifetime? Were entrepreneurs an integral part of their development? Did the entrepreneurs become wealthy?