If you were macroeconomic policy maker (Graded A+) - use as a guide only - 22763

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If you were macroeconomic policy maker, how do you balance the short-run tradeoff between inflation and unemployment? Explain. Give examples on how the definition of unemployment rate overstates or understates the number of jobless people in the economy? Why does the economy fluctuate? Why does fluctuation lead to unemployment and inflation? What do you think can be done to remedy these failures? Some policymakers and analysts argue that unemployment benefits create disincentives for job search and prolong the unemployment of workers. What’s your opinion on the relationship between unemployment benefits and labor market participation of the unemployed people?

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