Consider the following headline: U.S. consumer spending up 0.4 percent in January while income increased 0.3 percent

Published March 03, 2014

Associated Press

According to the NBC Learn clip  Consumer Confidence Hits Five-Year High, how does optimism and certainty about the economy affect consumer spending? Synthesizing the concepts of consumer confidence and aggregate demand, describe how spending can bring an economy out of a recessionary gap and whether increased spending is justified even if incomes don’t keep up.

Please discuss the following questions   A) Structural Unemployment in Eastern GermanyThis EIA looks at the unemployment rate in Eastern Germany following the reunification of East and West Germany after the fall of the Berlin wall.1. What type of unemployment did East Germany experience after unification, and why? 2. What caused wage rates in eastern Germany to remain relatively high despite lower worker productivity?

B) Israel’s Experience with Inflation

This EIA presents the example of inflation in Israel in the mid-1980s.

1. What is meant by the term “clean” inflation?2. Give an example of each of the types of inflation costs during Israel’smid-1980s inflation.