Assume that the following are the statistics for Xlandia's inflation and unemployment from 1985 to 2020. (Your answer should be 200 words ±10%) Year Inflation (%) Unemployment (%) Year Inflation (%) Unemployment (%) 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 6.3 9.4 7.3 9.1 16.0 24.3 16.6 15.8 8.3 13.4 18.0 11.9 8.6 4.6 5.0 6.1 3.4 3.7 2.4 3.0 3.3 2.3 2.3 3.6 5.6 6.0 5.9 5.0 6.4 9.8 11.3 12.4 11.7 11.2 11.2 10.3 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4.9 7.8 9.5 5.9 3.7 1.6 2.4 3.5 2.4 3.1 3.4 1.5 3.0 1.8 1.7 2.9 3.0 2.7 8.9 7.3 6.9 8.5 9.8 10.5 9.8 8.8 8.3 7.2 6.3 6.1 5.6 4.9 5.2 5.0 4.8 4.7 (a) Draw the line of best fit through the points on the diagram. Does it look anything like a Phillips curve? (b) Now draw the line of best fit for four separate curves: one for the period 1985-89; one for 1995-00; one for 2001-2008; and one for 2009-2020. (1) In which two of the four periods is there apparently a trade-off and (II) in which one of these two is the inflation/unemployment relationship more favourable? (c) How would you describe the relationship between inflation and unemployment between 2009 and 2020. (d) To what extent is your diagram consistent with the Keynesian argument that the Phillips curve is downward sloping but has shifted? Draw the line of best fit connecting the points in chronological order. Describe the pattern that emerges. How would any apparent clockwise loops in the Phillips curve be explained by the adaptive expectations model? (g) How would you account for the relationship (or lack of it) between inflation and unemployment since 2009?
Assume that the following are the statistics for Xlandia's inflation and unemployment from 1985 to 2020. (Your answer should be 200 words ±10%) Year Inflation (%) Unemployment (%) Year Inflation (%) Unemployment (%) 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 6.3 9.4 7.3 9.1 16.0 24.3 16.6 15.8 8.3 13.4 18.0 11.9 8.6 4.6 5.0 6.1 3.4 3.7 2.4 3.0 3.3 2.3 2.3 3.6 5.6 6.0 5.9 5.0 6.4 9.8 11.3 12.4 11.7 11.2 11.2 10.3 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4.9 7.8 9.5 5.9 3.7 1.6 2.4 3.5 2.4 3.1 3.4 1.5 3.0 1.8 1.7 2.9 3.0 2.7 8.9 7.3 6.9 8.5 9.8 10.5 9.8 8.8 8.3 7.2 6.3 6.1 5.6 4.9 5.2 5.0 4.8 4.7 (a) Draw the line of best fit through the points on the diagram. Does it look anything like a Phillips curve? (b) Now draw the line of best fit for four separate curves: one for the period 1985-89; one for 1995-00; one for 2001-2008; and one for 2009-2020. (1) In which two of the four periods is there apparently a trade-off and (II) in which one of these two is the inflation/unemployment relationship more favourable? (c) How would you describe the relationship between inflation and unemployment between 2009 and 2020. (d) To what extent is your diagram consistent with the Keynesian argument that the Phillips curve is downward sloping but has shifted? Draw the line of best fit connecting the points in chronological order. Describe the pattern that emerges. How would any apparent clockwise loops in the Phillips curve be explained by the adaptive expectations model? (g) How would you account for the relationship (or lack of it) between inflation and unemployment since 2009?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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can you please solve the E part
Transcribed Image Text:Assume that the following are the statistics for Xlandia's inflation and unemployment from 1985
to 2020. (Your answer should be 200 words ±10%)
Year
Inflation ()
Unemployment (%)
Year
Inflation (C)
Unemployment (%)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
6.3 9.4 7.3 9.1 16.0 24.3 16.6 15.8 8.3 13.4 18.0 11.9 8.6 4.6 5.0 6.1 3.4 3.7
2.4 3.0 3.3 2.3 2.3 3.6 5.6 6.0 5.9 5.0 6.4 9.8 11.3 12.4 11.7 11.2 11.2 10.3
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4.9 7.8 9.5 5.9 3.7 1.6 2.4 3.5 2.4 3.1 3.4 1.5 3.0 1.8 1.7 2.9 3.0 2.7
8.9 7.3 6.9 8.5 9.8 10.5 9.8 8.8 8.3 7.2 6.3 6.1 5.6 4.9 5.2 5.0 4.8 4.7
(a) Draw the line of best fit through the points on the diagram. Does it look anything like
a Phillips curve?
(b) Now draw the line of best fit for four separate curves: one for the period 1985-89;
one for 1995-00; one for 2001-2008; and one for 2009-2020. (I) In which two of the
four periods is there apparently a trade-off and (II) in which one of these two is the
inflation/unemployment relationship more favourable?
(c) How would you describe the relationship between inflation and unemployment
between 2009 and 2020.
(d) To what extent is your diagram consistent with the Keynesian argument that the
Phillips curve is downward sloping but has shifted?
(e)
Draw the line of best fit connecting the points in chronological order. Describe the
pattern that emerges.
(f)
How would any apparent clockwise loops in the Phillips curve be explained by the
adaptive expectations model?
How would you account for the relationship (or lack of it) between inflation and
unemployment since 2009?
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