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For this assignment, address all of the following parts:
Part A. Describe a hypothetical situation where either demand-pull or cost-push inflation occurs, addressing how the situation affects either the AD or AS curve, as well as the implications for prices and the overall effect on the economy. (Think about the circular flow model to help answer this question). You may include a graph to help illustrate your point.
Part B. Pick one of the populations listed and describe how inflation impacts this population in your example. Are their lives improved, about the same, or worse off? Describe why.
Homeowners (mortgage holders and/or people who have paid off their homes)
Young families
Working poor
The rich
Part C. What action can society (the government) take to minimize the negative impact on those most affected by the inflationary event? What trade-offs does society have to make? Make sure that your proposal has a reasonable chance of being passed by the country’s elected officials. Please use research to support your response.


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