Problem
1. Give two different explanations of how the economy can suffer from stagflation.
2. Why do you think wages tend to be rigid in the downward direction?
3. Explain in words why rising prices reduce the multiplier effect of an autonomous increase in aggregate demand.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.