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Finance issue solution?

Hey, I have a task to debate about a recent financial issue in the economy, and to talk about a possible solution to it. Whether its to do with the stock market or banks etc anything finance related, has anyone got any suggestions on what I can do it on?

Reply 1

SMB7

Monetary policy
Exchange rate policy

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Reply 2

Natek18

Yeah I guess I can talk about the exchange rate, how the pound has weakened recently and although this is seen as good due to AD reasons and creating jobs, I can suggest the issue here is cost push inflation and it can resolved by increasing the strength of the pound?

Reply 3

SMB7

Nope, cost-push inflation would decrease AS, which would be bad for AD as well, as prices would rise not because of increased incomes, but because of reduced output produced in an economy.

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Reply 4

SMB7

Here you talk not about cost-push, but demand-pull inflation as you mention increasing AD and employment. Therefore, you will have to sacrifice increase in output to reduce the price. You could use supply-side policy to expand an economy, but it would have benefits only in long term, while stock markets are very volatile

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