Financial Management

FINANCIAL
MANAGEMENT

Table of Contents
Questions.....................................................................................................................................3
REFERENCES................................................................................................................................5

Questions
A1.) c) Inflation
Inflation all over the world has been rising and has affected people's savings and country's
revenue investments in projects and schemes for the country (Bonfatti and et.al., 2020). Inflation
causes the value of money diminish and as a result,value of money diminishes with time.
A2.) d) Lowers the natural rate of unemployment and raise inflation.
As unemployment decreases the natural rate of unemployment will decrease too although as
people get wages there will be more money in circulation causing the price of products and
services go high.
A3.) b) stops inflation and without decreasing the rate at which money is growing
Wage/price control allows to stop inflation because a proportion of wages and price going hand
in hand will make the inflation under control and not affect the economy.
A4.) c) Regardless of worker's inflation estimates
If aggregate demand increases there will be requirement to produce more goods raising
requirement of workers at firms leading firms to perform recruitment measures and thus
unemployment will decrease (Hiroki, 2018).
A5.) b) Inflation is the goal where Fed has greater influence as Fed possesses the money
management tools to control liquidity in the market which will take care of the demand of goods
and thus will be related to employment as well.
A6.)c) deficit and reduction in central bank annual bond purchases