1.Suppose the Phillips curve is represented by the following equation: Tt-Tt-1 = 12-Ut. The natural rate of unemployment in this economy is? (show your working) 2.A $100 (real) billion increase in government spending, G will have which of the following effects in the medium run? 3.A reduction in unemployment insurance will cause the wS relation to shift down, explain why?

1.Suppose the Phillips curve is represented by the following equation: Tt-Tt-1 = 12-Ut. The natural rate of unemployment in this economy is? (show your working) 2.A $100 (real) billion increase in government spending, G will have which of the following effects in the medium run? 3.A reduction in unemployment insurance will cause the wS relation to shift down, explain why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The figure below depicts the economy of Altrua, which is presently in equilibrium. Enter your responses below rounded to one decimal place. Price level AS AD LAS 340 360 380 400 420 440 460 480 500 520
I'd like help on first 3 subsections
Explain correct option and explanation of the incorrect options Note: Hand written solutions are prohibited.
Need help with this. Thanks!
Supposed that each of the following rows represents the choice faced by policy makers given the current set of U.S. institutions and technology. What is the opportunity cost of reducing unemployment from 8 percent to 4 percent? Explain your Choice. a) 4 percentage points of unemployment. b) 6 percentage points of unemployment. c) 6 percentage points of inflation. d) 4 percentage points of inflation. Uemployment Inflation 10 3 8 4 6 5 5 7 4 10
5. Consider the standard Phillips curve. Select all the correct statements: (a) A positive aggregate demand shock will lead to an upward shift in the Phillips curve. (b) Changes in short-run output will lead to movements along the Phillips curve. (c) A negative inflation shock will lead to movements along the Phillips curve. (d) A shock to the price of oil will lead to a shift in the Phillips curve. (e) The inflation rate will always be equal to zero when short-run output is equal to zero.
I need help w A and B; answers are provided. And are correct.
IS-MP & Phillips Curvel a. Draw an economy in long-run equilibrium when the real interest rate is 3.5% using the IS-MP model as a function of the output gap. On the graph below, show the Phillips Curve as a function of the unemployment rate if the natural rate off unemployment is 4.6%. Label the initial equilibrium point A. b. Now show the effect of an increase in investment in the IS-MP and the Phillips Curve. Label this new equilibrium point B. IS-MP Phillips Curve (as a function of Unemployment)
Suppose the Phillips curve is given by the following: 2ut It Where: π = Tt-1 Suppose πt-1 = 0; at year t, authorities decide to keep unemployment rate at 4% forever. a. Compute the rate of inflation for years t+1, t+2 and t+3. b. Suppose half of labor contract of workers has been indexed. What is the new equation for the Phillips curve? Compute the rate of inflation for years t+1, t+2 and t+3. i. π = 0.1 ii. iii. Compared to your answers in problem (a), what can you conclude?
What type of unemployment do retraining programs seek to reduce? How might government-funded retraining influence the natural unemployment rate? Retraining programs seek to reduce the amount of _______ unemployment because _______. A. frictional; by giving workers the skills needed for the available jobs, people entering the labor force will immediately find employment B. cyclical; by giving workers the skills needed for the available jobs, recessions can be avoided C. structural; the programs aim to give workers the skills needed for the available jobs D. all types of; the natural unemployment rate will fall