Important stuff from papers

Question 1

Increase quality of labour (skillsfuture)

how does it shift SRAS and help cost-push infla

Answer 1

1. Increase output per man hour
2. Decrease unit COP
3. Decrease overall COP
4. SRAS increase
5. Decrease cost-push inflation

Question 2

DO NOT say decrease in AG, only say negative AG

Answer 2

Decrease in RNY/total output MUST BE PERSISTANT FOR 2 CONSECUTIVE QUARTERS

Question 3

Conditions for cost-push inflation

Answer 3

SUSTAINED increase in GPL
increase unit COP (for SRAS) INDEPENDENT of increase in AD

and it MIGHT happen. NOT definitely!

Question 4

Condition for firms to continue stepping up production

Answer 4

increase prod as long the increase in prices are faster than P of inputs used to produce

Question 5

condition for DDpull inflation

Answer 5

SUSTAINED increase in GPL
arising from continuous large increase in AD wo corrsponding increase in prod cap of economy