Business, 09.11.2019 01:31 dbenjamintheflash5

Milovia is a small open economy. the general price level in the economy has been increasing at a rate of about 7.5 percent each year. jane wilson, an industry analyst, is of the opinion that such high inflation is adversely affecting aggregate demand in the economy and therefore its ability to grow. her colleague, harry gomes, however, disagrees. according to harry, some amount of inflation is unavoidable in a growing economy. higher prices for products to increase the level of corporate profits and induce firms to increase aggregate output. jane's argument is based on which of the following assumptions? a. the increase in the price of inputs outweighed the increase in the price of the final product.
b. the milovian currency recently depreciated in the foreign exchange market.
c. the purchasing power of nominal assets declines with an increase in the price level.

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Milovia is a small open economy. the general price level in the economy has been increasing at a rat...

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