Business Cycles, Unemployment, and Inflation PDF

CHAPTER 29 Business Cycles, Unemployment, and Inflation cause learning changes everything.® ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Cha...

CHAPTER 29 Business Cycles, Unemployment, and Inflation cause learning changes everything.® ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Chapter Contents The Business Cycle Unemployment Inflation Redistribution Effects of Inflation Does Inflation Affect Output? 29-2 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Learning Objectives LO29.1 Describe the phases of the business cycle. LO29.2 Measure unemployment and explain the different types of unemployment. LO29.3 Measure inflation and distinguish between cost-push inflation and demand-pull inflation. LO29.4 Explain how unanticipated inflation can redistribute real income. LO29.5 Describe how inflation may affect the economy’s level of real output. 14-3 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  The Business Cycle Alternating increases and decreases in economic activity over time Phases of the business cycle: Peak - when business activity reaches a temporary maximum with full employment and near-capacity output Recession - decline in total output, income, employment, and trade lasting six months or more (economic contraction) Trough- bottom of the recession period Expansion - when output and employment are recovering and expanding toward the full employment level. (economic expansion) 29-4 LO29.1 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  The Business Cycle Illustrated Peak Level of real output Peak sion Peak d Tren n Expa R ec ion w th es G r o si ans on R ec Exp es Trough si on Trough Time 29-5 LO29.1 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  U.S. Recessions since 1950 Depth Duration, (Decline in Real They declared Period Months Output) that the 2007 1953–54 10 –2.6% recession began 1957–58 8 –3.7 in December 1960–61 10 –1.1 2007 and ended 1969–70 11 –0.2 in June 2009. 1973–75 16 –3.2 1980 6 –2.2 1981–82 16 –2.9 1990–91 8 –1.4 2001 8 –0.4 2007–09 18 –4.3 29-6 LO29.1 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education. Source: Bureau of Economic Analysis, www.bea.gov  Business Cycle Fluctuations Uneven growth has been the pattern, with inflation often accompanying rapid growth, and declines in employment and output during periods of recession and depression. 1. Economic shocks - unexpected events that individuals and firms may have trouble adjusting to. Prices can be inflexible downwards, which means that if total spending unexpectedly decreases and firms cannot lower prices, the firms will end up selling less units of output 2. Prices are “sticky” downwards - result in slower sales, which will cause firms to cut back on production; this LO29.1 causes GDP to fall. 29-7 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Cause of shocks 1. Political events – war 2. Financial instability - The recession of 2007 was led by excessive money, overvalued real estate, and unsustainable mortgage debt. 3. Irregular innovation - Major innovations may trigger new investment and/or consumption spending, irregular and unexpected, may contribute to the variability of economic activity. Examples include the computer and the Internet 4. Productivity changes - Unexpected changes in resource availability or unexpected changes in the rate of technological advances can affect productivity. 5. Monetary factors - monetary authorities print more money, an LO29.1 inflationary boom can occur. Printing less money than what 29-8 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Cyclical Impact Durable goods affected most: (expected life more than 3 years) Capital goods (machine, factory) Consumer durables (car, house, jewelry) Nondurable consumer goods affected less: LO29.1 Services – banks, hospital ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education. 29-9  14-10 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  14-11 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  In Class Exercise 1. Describe the four phases of the business cycle. 2. What are five economic shocks that may cause business cycles? 14-12 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 1. As it relates to economic growth, the term long-run trend refers to A. the long-run increase in the relative importance of durable goods in the U.S. economy. B. the long-term expansion or contraction of business activity that occurs over 50 or 100 years. C. fluctuations in business activity that average 40 months in duration. D. fluctuations in business activity that occur around Christmas, Easter, and other major holidays. 2. The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are A. military goods and capital goods. B. services and nondurable consumer goods. 14-13 C. clothing and education. ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 3. A recession is defined as a period in which A. cost-push inflation is present. B. nominal domestic output falls. C. demand-pull inflation is present. D. real domestic output falls. 4. Which of the following statements is true about causes of business cycle fluctuations? A. Economists all agree that supply shocks are the cause of most business cycle fluctuations. B. Economists all agree that productivity shocks are the cause of most business cycle changes. 14-14 C. Economists all agree that monetary changes are primarily responsible for ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  5. What is the primary reason that changes in total spending lead to cyclical changes in output and employment? A. Government is unable to respond by changing the amount of money in circulation. B. Changes in total spending cause supply shocks that cause cyclical variation. C. Prices are sticky in the short run. D. Prices are flexible in the long run. 6. Which of the following would most likely move the economy into a recession in the short term? A. invention of a new product that most consumers want to buy B. innovations in management that enhance worker productivity C. the central bank printing less money than was anticipated 14-15 D. Congress passing a reduction in personal income tax rates ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  7. In the expansion phase of a business cycle, A. the inflation rate decreases, but productive capacity increases. B. the inflation rate and productive capacity decrease. C. employment increases, but output decreases. D. employment and output increase. 14-16 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Unemployment Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.  The U.S. Labor Force, Employment, and Unemployment, 2018 Group 1 consists of those under age 16 or institutionalized. If you are Outside in an institution such as a nursing home or prison, you obviously labor cannot present yourself to the labor market. force (7.45 million) Group 2 consists of those “not in labor force.” Examples of individuals who are not in the labor force are full-time college students who are not working, stay-at-home parents, and retirees. Employed ) (15.38 million) Labor force (Employed + Unemployed) (16.13 million) Group 3 consists of those age 16 and over who are willing and able to work and actively seeking work (individuals who have demonstrated job search activity within the last four weeks)- LABOR FORCE Unemployed (748.8 thousand) 29-18 LO29.2 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Unemployment Rate Formula 14-19 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Criticisms of Unemployment Involuntary part-time workers counted as full-time. Discouraged workers are not counted as unemployed.- who want a job, but are not actively seeking one, are not counted as being in the labor force, so they are not part of the unemployment statistic. 29-20 LO29.2 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Types of Unemployment Frictional unemployment: Individuals searching for jobs or waiting to take jobs soon Structural unemployment: Occurs due to changes in the structure of the demand for labor - when certain skills become obsolete or geographic distribution of jobs changes. This can be a long-term type of unemployment. The introduction of AI and IT revolution. 2nd factor – changes of factory due to lower cost of production. Example Zara factory in Bangladesh, Nike Factory in Vietnam Cyclical unemployment: Caused by the recession phase of the business cycle - firms respond to insufficient demand for their goods and services, output and employment are reduced. Extreme unemployment during the Great Depression (25 percent in 1933) is an example of cyclical unemployment 29-21 LO29.2 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Natural Rate of Unemployment The natural rate is achieved when labor markets are in balance; the number of job seekers equals the number of job vacancies. 14-22 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Full Employment 14-23 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Economic Cost of Unemployment GDP Gap GDP gap = actual GDP – potential GDP Can be negative or positive Okun’s Law: Every 1% of cyclical unemployment creates a 2% GDP gap This means that the country is producing LO29.2 below what could potentially be produced, 29-24 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Exercise Assume the natural rate of unemployment in the U.S. economy is 5 percent and the actual rate of unemployment is 9 percent. According to Okun's law, a percentage of potential GDP is Answer: Potential GDP (cyclical unemployment) = actual rate of unemployment – Natural Rate of employment = 9% - 5% = 4% According to Okun’s law the potential GDP = 4% x 2 = 8% 14-25 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Actual and Potential Real GDP and the Unemployment Rate (a) The difference between actual and potential GDP is the GDP gap. A negative GDP gap actual GDP below potential GDP. A positive GDP gap indicates that actual GDP is above potential GDP. (b) A high unemployment rate means a large GDP gap (negative), and a low unemployment rate means a small or even positive GDP gap. 29-26 LO29.2 Sources: Congressional Budget Office; Bureau of Economic ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education. Analysis; and Bureau of Labor Statistics.  Unequal burdens of unemployment exist Occupation Age Race and ethnicity Gender - Rates for males and females are comparable, although females currently have a lower unemployment rate Education LO29.2 Duration 29-27 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Noneconomic Costs Loss of skills and loss of self-respect Reducing morale Family disintegration Poverty and reduced hope Heightened racial and ethnic tensions Suicide, homicide, fatal heart attacks, mental illness Can lead to violent social and political change 29-28 LO29.2 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  In class exercise 1. In the table below are statistics showing the labor force and total employment in month 1 and month 2 of the same year. Make the computations necessary to complete the table. (Number of persons is in thousands.) Month 1 Month 2 Labor force 136,297 137,065 Employed 129,558 129,526 Unemployed _____ _____ Unemployment rate (%) _____ _____ 14-29 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  In class exercise 2. If the population is 267 million, the labour force is 136 million, and the number measured as unemployed is 6.8 million, what is the rate of unemployment? 14-30 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  In class exercise 4. Name the type of unemployment occurring in each of the causes below and explain your answer. (a) Frank recently lost his job as the computer manufacturing company he works for recently downsized after poor sales and poor performance of the economy during the last year. (b) Julie just recently graduated from college and is spending the summer traveling before she begins a job with a consulting firm in the fall. (c) Tom recently lost his job as the steel manufacturing firm he worked for moved their plant overseas. The other steel plants in the nation have been also been following this trend. (d) Susan recently left her marketing job at a local bank because she found that finance interests her more. She is currently looking for a job 14-31 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 1. What is the primary reason that changes in total spending lead to cyclical changes in output and employment? A. Government is unable to respond by changing the amount of money in circulation. B. Changes in total spending cause supply shocks that cause cyclical variation. C. Prices are sticky in the short run. D. Prices are flexible in the long run. 2.Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management. Kara presently is A. cyclically unemployed. B. structurally unemployed. 14-32 C. frictionally unemployed. ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ Unemployed 7 Total Population 145 Employed 95 Discouraged Workers 3 3. The table contains information about the hypothetical economy of Scoob. All figures are in millions. The unemployment rate in Scoob is A. 2.5 percent. B. 3.2 percent. C. 5.0 percent. D. 6.9 percent. 14-33 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 4. The natural rate of unemployment is A. higher than the full-employment rate of unemployment. B. lower than the full-employment rate of unemployment. C. that rate of unemployment occurring when the economy is at its potential output. D. found by dividing total unemployment by the size of the labor force. 5. If the unemployment rate is 9 percent and the natural rate of unemployment is 5 percent, then the A. frictional unemployment rate is 5 percent. B. cyclical unemployment rate and the frictional unemployment rate together are 5 percent. C. cyclical unemployment rate is 4 percent. 14-34 D. natural rate of unemployment will eventually increase. ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 6. Part-time workers who want full-time work are counted as A. unemployed, and therefore the official unemployment rate may overstate the level of unemployment. B. unemployed, and therefore the official unemployment rate may understate the level of unemployment. C. fully employed, and therefore the official unemployment rate may overstate the level of unemployment. D. fully employed, and therefore the official unemployment rate may understate the level of unemployment. 14-35 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 7. Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, all else equal, the official unemployment rate would A. decline. B. increase. C. increase in the short run but eventually decline. D. be unchanged. 14-36 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ Full-Time Employed = 80 Part-Time Employed = 25 Unemployed = 15 Discouraged Workers = 5 Members of Underground Economy = 6 Consumer Price Index = 110 Refer to the given information about a hypothetical economy. The unemployment rate is A. 18.8 percent. B. 12.5 percent. C. 16.7 percent. D. 25 percent. 14-37 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Inflation Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.  Inflation General rise in the price level. Inflation reduces the “purchasing power” of money. Consumer Price Price of theIndex (CPI): most recent market CPI data for 2018, there is a CPI = price index ofbasket 251.1, in andthe particular 2017 year (CPI has a price index2018-2017) of 245.1 Price estimate of the market × 100 Basket 2017 CPI = 251.1 – 245.1 245.1 × 100 = 2.4% 29-39 LO29.3 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Rule 70 Rule of 70” permits quick calculation of the time it takes the price level to double: Divide 70 by the percentage rate of inflation, and the result is the approximate number of years for the price level to double. Here the inflation rate is 2.4% so divide 70 by 2.4 and you get the number 29.17. Therefore, it would take about 29 years for prices to double at that rate of inflation. If the inflation rate is 7 percent, then it will take about ten years for prices to double. (7/70) 14-40 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Exercise Answer the next four questions based on the following data using year 1 as the base year. All dollars are in billions. Calculate to one decimal place. Year CPI 1 160 2 165 3 170 4 177 (a) What was the percentage rise in prices between years 1 and 2? (b) What was the percentage rise in prices between years 2 and 3? (c) What was the percentage rise in prices between years 3 and 4? 14-41 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Annual Inflation Rates in the United States, 1960–2018 December-to-December changes in the CPI 29-42 LO29.3 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education. Source: U.S. Bureau of Labor Statistics.  Global Perspective 29.1 INFLATION RATES IN FIVE INDUSTRIAL NATIONS, 2008–2018 29-43 LO29.3 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education. Source: International Monetary Fund.  Demand-Pull and Cost-Push Inflation increasing Demand-pull inflation:spending faster than production (demand is faster than supply) Prices rise because of a rise in per-unit production costs (Unit cost = total input cost/units of output). Excess spending relative to output Central bank issues too much money 29-44 LO29.3 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Demand-Pull and Cost-Push Inflation rise, but Cost-push inflation:prices output falls 1. Rising costs reduce profits - reduce the amount of output producers are willing to supply at the existing price level. 2. Supply of goods and services declines, and the price level rises. Supply shocks have been the major source of cost- push inflation. 14-45 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Types of Inflation Difficult to distinguish inflation types. Types differ in sustainability: Demand-pull continues as long as the excess spending continues – until inflation Cost-push ends in a recession. (During recession less demand and cost of raw material decreasing) Core inflation: Without food and energy goods (gasoline) – early indication of inflation if these categories of large price swings. Focuses on more stable prices. 29-46 LO29.3 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Redistribution Effects of Inflation Nominal income: Unadjusted for inflation. Real income: Nominal income adjusted for inflation. Anticipated versus unanticipated income. Percentage Percentage Percentage change in  change in nominal − change in real income = income price level 29-47 LO29.4 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Who Is Hurt by Inflation? 1. Fixed-income receivers: Real incomes fall. 2. Savers: Value of accumulated savings deteriorates. 3. Creditors: Lenders get paid back in “cheaper dollars.” 29-48 LO29.4 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Who Is Unaffected by Inflation? Flexible-income receivers COLAs -pension Social Security recipients Union members Debtors: Pay back the loan with “cheaper dollars.” 29-49 LO29.4 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Does Inflation Affect Output? Cost-push inflation: where resource prices rise unexpectedly, could cause both output and employment to decline. Reduces real output. Real income falls. Demand-pull inflation: One view is that zero inflation is best- (economy will stagnant) Another view is that mild inflation (less than 3%) is uncertain. (It may be a healthy by-product of a prosperous economy, or it may have an undesirable impact on real income.) 29-50 LO29.5 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Hyperinflation Hyperinflation is defined as inflation of more than 50 percent per month, which translates to an effective rate of over 13,000 percent per year. It is condemned by all economists because of its devastating impacts on real output and employment As prices shoot up, business owners do not know what to charge, and consumers do not know what to pay. Production declines as businesses stop today’s work in anticipation that they will be able to sell for more in the future. Investment declines as savers refuse loans as they would be paid back in cheaper money in the future. The use of money finally stops, reducing the economy to a barter system. Examples: Germany after WWI Japan after WWII Hyperinflation is caused by governments’ expansions of the money supply, which is typically the result of bad decisions. 29-51 LO29.5 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  Last Word: The Great Skills 1. Shortage Job market slow to recover after the Great Recession. 2. More job openings than people unemployed. 3. Skills mismatch due to decrease in vocational education programs. 4. Demographic and geographic issues. 5. Unrealistic expectations of employers. ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education. 29-52  In class exercise 1. What is “demand-pull” inflation? 2. Describe cost-push inflation and its major source. 14-53 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 1. Inflation means that A. all prices are rising, but at different rates. B. all prices are rising at approximately the same rate. C. prices on average are rising, although some particular prices may be falling. D. real incomes are rising. 2. The consumer price index was 177.1 in 2001 and 179.9 in 2002. Therefore, the rate of inflation in 2002 was about A. 2.8 percent. B. 3.4 percent. C. 1.6 percent. D. 4.1 percent. 14-54 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 3. If Fred's annual real income rises by 8 percent each year, using rule 70 his annual real income will double in about A. 8 to 9 years. B. 10 to 11 years. C. 5 to 6 years. D. 19 to 20 years. 4. Demand-pull inflation A. occurs when prices of resources rise, pushing up costs and the price level. B. occurs when total spending exceeds the economy's ability to provide output at the existing price level. C. occurs only when the economy has reached its absolute production capacity. D. is also called cost-push inflation. 14-55 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 5. Rising per-unit production costs are most directly associated with A. frictional unemployment. B. structural unemployment. C. demand-pull inflation. D. cost-push inflation. 6. Which of the following would most likely occur during the expansionary phase of the business cycle? A. demand-pull inflation B. cost-push inflation C. structural inflation D. frictional inflation 14-56 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 7. If the nominal interest rate is 5 percent and the real interest rate is 2 percent, then the inflation premium is A. 8 percent. B. 5 percent. C. 3 percent. D. 2 percent. 8. With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 6 percent. But if the rate of inflation was anticipated to be 4 percent, the bank would most likely charge the firm an annual interest rate of A. 2 percent. B. 4 percent. C. 6 percent. D. 10 percent. 14-57 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.  MCQ 9. In the 1920s, Germany after the First World War experienced an economic condition that can be best described as A. hyperinflation. B. cost-push inflation. C. unanticipated inflation. D. anticipated inflation. 14-58 ©2021 McGraw Hill Education. All rights reserved. No reproduction or further distribution without the prior written consent of McGraw Hill Education.