Inflation help?

Explain how an increase in nominal income %26amp; a decrease in real income might occur at the same time.

(1) Who does inflation hurt?

(2) Who does unemployment hurt? Explain the two answers.

(3) If you had to choose between full employment with 7% inflation annually or 9% unemployment with no or a very low %26amp; stable inflation rate, which would you choose? Why?

Inflation help?

Explain how an increase in nominal income %26amp; a decrease in real income might occur at the same time.

If the money supply M1 and M2 are increased by the fed then we can have nominal increases in wages, but les purchasing power.

(1) Who does inflation hurt?

Inflation hurts everyone but in particular it hurts asset holders.

(2) Who does unemployment hurt? Explain the two answers.

It looks like you are taking and intro to econ class. Unemployment is much more limited in who it hurts then inflation. Unemployment primary hurts the 6 or 8 percent of people who are unemployed.

(3) If you had to choose between full employment with 7% inflation annually or 9% unemployment with no or a very low %26amp; stable inflation rate, which would you choose? Why?

It depends on the assets I held and my skill level. I had a low income earning ability say minimum wage to twice that I would pick full employment. In fact if I were a high school drop out me would pick full employment. But if I owned a house, if I has an ira if I had some savings and I had a middle class job I would pick 9% unemployment and no inflation

Inflation help?

Dude, study your own homework...

Say you make 100,000 dollars a year. If your boss gives you a 2% raise you will make 102,000 next year. Now, say inflation is 4 percent. For you to have same buying power as the 100,000 you just made, you would need a raise of 4%.

Because 100,000 x1.02 (your raise) = 102,000

And, 100,000x1.04(rate of inflation)

102,000 %26lt; 104,000 - you just got a nominal raise, but lost real money, because you now make less real money (purchasing power) than you did last year.

Inflation hurts everyone. It is a general raise in prices across the board...Not every product will increase.

Unemployment hurts everyone in that, typically, many unemployed people have to turn to government aid. That is tax money being used. Taxes we all pay. Further, areas with large unemployment, typically see increases in crime and poverty.

3 - that is up to you. Whats worse, everyone employeed but peoples real wages keep getting smaller.

Or

Double the current unemployment rate in the USA, but prices not changing.

BOTH WOULD SUCK...