Question 1: Describe the difference between demand-pull inflation and cost-push inflation. Define the difference between inflation, hyperinflation, disinflation and deflation. Why do economists currently have concerns that the US economy seems to be heading towards a) disinflation and b) deflation?
Question 2: Define what economists mean by gross investment and net investment. What do they mean by depreciation? What are the independent variables - both endogenous and exogenous - leading to an upward movement in net investment? What is the role of net inventory changes within total net investment? What are the current trends in net investment?