Table 35-1An economist working for the Central Bank of Fredonia estimates a Phillips curve for Fredonia and reports the following points onActual Inflation Rate(Percent)5432Unemployment Rate(Percent)4.04.55.05.5Refer to Table 35-1. Which of the following statements is correct?Oa. These points are consistent with the theoretical short-run Phillips curve, but now with the long-run Phillips curve.Ob. These points are consistent with both the theoretical short-run and long-run Phillips curves.Oc. These points are not consistent with either the theoretical short-run or long-run Phillips curves.Od. These points are consistent with the theoretical long-run Phillips curve, but not with the short-run Phillips curve.

Macroeconomics examines the working, composition, and dynamics of an economy. To comprehend and…

Actual Inflation Rate (Percent) 5 4 3 2 Unemployment Rate (Percent) 4.0 4.5 5.0 5.5 Refer to Table 35-1. Which of the following statements is correct? Oa. These points are consistent with the theoretical short-run Phillips curve, but not with the long-run Phillips curve. Ob. These points are consistent with both the theoretical short-run and long-run Phillips curves. Oc. These points are not consistent with either the theoretical short-run or long-run Phillips curves. Od. These points are consistent with the theoretical long-run Phillips curve, but not with the short-run Phillips curve.

Actual Inflation Rate (Percent) 5 4 3 2 Unemployment Rate (Percent) 4.0 4.5 5.0 5.5 Refer to Table 35-1. Which of the following statements is correct? Oa. These points are consistent with the theoretical short-run Phillips curve, but not with the long-run Phillips curve. Ob. These points are consistent with both the theoretical short-run and long-run Phillips curves. Oc. These points are not consistent with either the theoretical short-run or long-run Phillips curves. Od. These points are consistent with the theoretical long-run Phillips curve, but not with the short-run Phillips curve.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Do the expected inflation rate and natural unemployment rate remain constant along the short-run Phillips curve? Along the short-run Phillips curve, _______. A. the expected inflation rate rises as the natural unemployment rate rises B. the expected inflation rate is constant and the natural unemployment rate varies C. the expected inflation rate and the natural unemployment rate are constant D. the expected inflation rate rises as the natural unemployment rate falls thank ss
From 2008-2009 the Federal Reserve created a very large increase in the money supply. According to the short-run Phillips curve this policy should have raised inflation and unemployment. Oraised inflation and reduced unemployment. O reduced inflation and raised unemployment. O reduced inflation and unemployment.
11. Changing the slope of the Phillips curve: Suppose the slope of the Phillips curve the parameter -increases. How would the results differ from the Inc Volcker disinflation example considered in the chapter? What kind of changes in the economy might influence the slope of the Phillips curve? on
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Question 3 Explain why the Phillips Curve is drawn to show a positive relationship between aggregate output and inflation, and why a move up the curve to an above- equilibrium output level may be followed by an upward shift of the whole curve. I
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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.
The natural unemployment rate is 6 percent and the expected inflation rate is 10 percent a year. Draw the long-run Phillips curve. Label it LRPCo. Draw the short-run Phillips curve. Label it SRPC- Draw a point at the natural unemployment rate and the expected inflation rate. Label it 1. Now the natural unemployment rate rises to 9 percent with no change in the expected inflation rate. Draw and label LRPC₁. Draw and label SRPC₁. Draw a point at the natural unemployment rate and the expected inflation rate. Label it 2. 20- 16- 12- 8- 4. 0- Inflation rate (percent per year) Q Q 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Unemployment rate (percentage of labor force) >>> Draw only the objects specified in the question.
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?
Rate Inflation 7 6 5 4 N 1 0 -1 -2 -3 0 De graph below depicts a short-run Phillips Curve. Move the line as needed to depict a long-run Phillips curve, then answer the question to the right. O 1 2 3 4 5 6 7 Unemployment Rate 8 9 10 The relationship between inflation and unemployment in the short run is different from their relationship in the long run. Which of the following is an important factor in that difference? Inflation Expectations Tax Rates Price Levels Okun's Law
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