Using Unemployment to Tame Inflation

The video discusses the global fiscal response to the COVID-19 pandemic, highlighting the increase in government debt in the US and Europe. It features a debate on the necessity of fiscal spending during a pandemic, emphasizing the importance of government support to sustain the economy. The discussion also explores alternative economic frameworks, such as the MTEF, which propose managing inflation and employment differently by ensuring full employment and price stability.

What was the percentage increase in the US government's debt burden in the first half of 2020?

• 14%

• 9%

• 5%

• 20%

According to the debaters, what is the current unemployment rate that is considered too high?

• 3.5%

• 6.9%

• 7.5%

• 5.0%

What is the main argument for maintaining fiscal support during the pandemic?

• To increase government savings

• To sustain incomes and prevent economic collapse

• To increase inflation

• To reduce taxes

What is the traditional method used to manage inflation according to the transcript?

• Reducing exports

• Raising interest rates

• Using unemployment

• Increasing government spending

What alternative approach is suggested for achieving price stability and full employment?

• Reducing government spending

• Using a buffer stock of employed workers

• Encouraging imports

• Increasing taxes