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  •  Economic growth, development economics, inflation and monetary policy

Click to read the article below and then answer the questions:

The Fed risks reacting too slowly if inflation keeps rising

  • With reference to chart 1, compare the recoveries in global output for 2020, 2009, 1991 and 1975

  • With reference to chart 2, compare the recoveries of the advanced economies with those of the emerging & developing economies

  • Briefly outline the reasons for the marked difference in the rate of economic recovery between the advanced economies and the emerging & developing economies

  • Using an AD/AS diagram, analyse the risks associated with President Biden’s highly aggressive monetary and fiscal policies

  • Given the lag between policy and outcomes, evaluate whether central banks of high-income economies should now begin to tighten monetary policy

Gavin Clarke, Emmanuel College

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