Answer to Question #286331 in Macroeconomics for Mula

Question

Currently, we Ethiopian faced a problem of war in some part of Ethiopia such as State of Amhara, State of Afar and Tigray. This problem caused low production, output, high unemployment rate, low aggregate demand. The macroeconomics has considered the state of macroeconomics, the philosophies that have been most important in the 21th century. Given the situation, what would a state of macro economics recommend be done? And as off you what would be done?

Answer 1

To combat inflation, the government can utilize wage and price regulations, but this might lead to a recession and job losses. To combat inflation, the government can use a contractionary monetary policy, which reduces the money supply inside an economy by lowering bond prices and raising interest rates. Simply put, increasing the amount or quality of the working-age people, the instruments with which they can work, and the recipes with which they can mix labor, capital, and raw materials will lead to higher economic output in Ethiopia. Monetary and fiscal policy are used to control the economy, economic growth, and inflation in order to achieve long-term growth.Government activities used to improve long-run growth include stimulating economic growth, enacting monetary policies, fixing the exchange rates, and using wage and price controls.