I need to brush up some of the below ECON FUNDS…if someone can help… Unanticipated expansionary monetary policy Unanticipiated restrictive monetary poilcy Unanticipated increase in inflation unanticipated decrease in infaltion and all others !!
unanticipated inflation leads to high unemployment.
unanticipated inflation transfers value from lenders to borrowers (because the value of debt decreases) transfers value from employees to employer (because real wage falls) and the reverse for unanticipated deflation? unanticipated expansionary monetary policy, not sure but I would guess that the increase MS causes a larger shift in AD to the right, increasing GDP and prices in short run. (Now, Im not sure here htough, doe Real GDP increase as well or just Nominal GDP) in the long run, AS shifts left, returning to long run equilibrium and prices raised.
yeah, if rates shoot up higher than what anyone modelled, workers are hurt b/c their $ takes em les farther and lenders are pissed b/c they wake up knowing " shi%, we could have charged joe 6 pack, 8 % on his mtgage, not 5.65%" BOOM the rest is phillips curve, know the tradeoff, in the long run, it is vertical graph, short case, oh so very different.