ECO202 Macroeconomics Assignment

Added on - 18 Sep 2019

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Running Head:ECO-202 Macroeconomic 18EWAMarch 7, 2018Name:Student Number:Word count:Name of the course:Tutor name:Date of the assignment:“MILESTONE-ONEMACROECONOMICDATAREPORT1|P a g e
Running Head:ECO-202 Macroeconomic 18EWAMarch 7, 20182|P a g e
Running Head:ECO-202 Macroeconomic 18EWAMarch 7, 2018The decade of 1970’s in US history of economy is found as the most terrific as well as vital timeperiod. In this era it has been observed that the economy as seemed to be trapped into newnightmare called “stagflation” because of the low economic growth along with highunemployment which is known as “stagnation” in other words for the presence of high inflationrate. As per the “Phillips Curve” which came in 1960’s, there is the stable inverse relationshipbetween unemployment as well as inflation. But in 1970’s this concept became totally wrongunder the situation of recession. Under recession time, the policymakers had to lower the interestrates by increasing the government spending. This in turn lower taxes for stimulating the demandas well as bring down the unemployment rate through the process of lowering the inflation rate.But when they were dealing with inflation, there were two ways. One way was to raise the interestrates by lowering the spending and the second way was to raise the taxes by reducing the demandfor the purpose to cool off the economy through the cost of increasing in unemployment rate. Inthis way, the high inflation rate as well as the high unemployment rate situation has been appearedand that lack the solution of the orthodox policy (Hacker, 2008). Also the stock price and GDPgrowth has shown lowest in this time zone. The consumer price has increased by an averagepercentage of 6.7. The double digit inflation rate is thus found which is considered by most of the3|P a g e