An inflation forecast developed in a Keynesian framework is likely to focus on

Question

Quizplus · Accepted Answer

In the Keynesian framework, inflation is primarily caused by changes in aggregate demand, which are driven by changes in household and business spending decisions. Therefore, an inflation forecast developed in a Keynesian framework would focus on these spending decisions. Factors such as government policy, changes in the labor market, and shifts in consumer confidence would all factor into the forecast. Federal Reserve policy and the velocity of money could also play a role, but they are not the primary drivers of inflation in this framework. International gold movements are not typically a factor in Keynesian inflation forecasts.

An Inflation Forecast Developed in a Keynesian Framework Is Likely