b. The change that takes place between 2018 and 2019 could be caused by (Click to select) v stabilization polices. The change that takes place between 2019 and 2020 could have been caused by (Click to select) v stabilization polices. c. Suppose that in 2021 the inflation rate is 5% and the unemployment rate is 11%. What has happened to the Phillips curve for Acadia? What could explain this change? Because the inflation rate is (Click to select) v and the unemployment rate is (Click to select) v than the values for these two variables during 2018 to 2020, the Phillips curve for Acadia has shifted (Click to select) v This shift is likely due to a(n) (Click to select) v in (Click to select) v with one of the following factors as a possible cause: O A drop in labour productivity. O A reduction in input prices. O A decrease in the consumption of durable items. An increase in investment spending.

b. The change that takes place between 2018 and 2019 could be caused by (Click to select) v stabilization polices. The change that takes place between 2019 and 2020 could have been caused by (Click to select) v stabilization polices. c. Suppose that in 2021 the inflation rate is 5% and the unemployment rate is 11%. What has happened to the Phillips curve for Acadia? What could explain this change? Because the inflation rate is (Click to select) v and the unemployment rate is (Click to select) v than the values for these two variables during 2018 to 2020, the Phillips curve for Acadia has shifted (Click to select) v This shift is likely due to a(n) (Click to select) v in (Click to select) v with one of the following factors as a possible cause: O A drop in labour productivity. O A reduction in input prices. O A decrease in the consumption of durable items. An increase in investment spending.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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From your understanding what the Phillips curve is, is it possible for the unemployment rate to increase while inflation also increases? Explain.
a) Explain the concept of the natural rate of unemployment using the expectations-augmented (modified or modern) Phillips curve model. b) Why is this model useful for policy-makers?
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Using what you know about the Phillips curve, determine whether the following quantities will increase, decrease, or remain the same. a. Unemployment in the short run after an increase in inflation: (Click to select) v b. Unemployment in the long run after an increase in inflation: (Click to select) v c. Inflation in the short run after a decrease in unemployment: (Click to select) d. Inflation in the long run after a decrease in unemployment: (Click to select) |(Click to select) decrease increase remain the same
As with demand and supply analysis, changes in the economy can cause both shifts of and movements along the short-run Phillips curve. Which of the following would cause a shift of the short-run Phillips curve? Check all that apply. An increase in government spending A decrease in short-run aggregate supply An increase in the expected inflation rate
Draw a Phillips curve graph here that shows a natural rate of unemployment of 4% and a current inflation rate of 2%. Make sure your lines and axes are labeled and your graph is complete! Use your knowledge of The Phillips Curve to answer the following questions. The threat of future inflation: makes people reluctant to loan money for long periods. makes people eager to loan money for long periods. has no effect on loaning money. increases the value of money paid back in the future. makes people reluctant to borrow money for long periods. According to the short-run Phillips Curve, there is a trade-off between: interest rates and inflation. the growth of the money supply and interest rates. unemployment and economic growth. inflation and unemployment. economic growth and interest rates. Which of the following is true of the long-run Phillips curve? it shows there is a trade-off between unemployment and inflation. it is positively sloped when the inflation rate exceeds…
Suppose that the Phillips curve is given by +0.1-2 U₂ and expected inflation is given by -(1-0) * +04-1 where 0 is equal to zero and x 0.02 and does not change. The economy is initially at the natural rate of unemployment, which is 5%, when the authorities decide to bring the unemployment rate down to 3% and hold it there forever. With 0 equal to zero, this will yield a 6% rate of inflation every year. Now suppose that in year (t+6), 0 changes to 1. 0 might increase in this way because OA government policy would mandate inflationary expectations. B. inflation expectations adapt to persistently positive inflation OC. inflation expectations change constantly. OD. inflation expectations always adapt immediately to the last period's inflation. In year (+6), the inflation rate will be % (Enter your response as an integer.) In year (+7), the inflation rate will be % (Enter your response as an integer.) In year (+8), the inflation rate will be%. (Enter your response as an integer)
What occurs when the natural unemployment rate increases? A. The short-run Phillips curve doesn't change and the long-run Phillips curve shifts rightward. B. The long-run Phillips curve doesn't change and the short-run Phillips curve shifts upward. C. The long-run and short-run Phillips curves shift rightward and the expected inflation rate rises. D. The long-run and short-run Phillips curves shift rightward and the expected inflation rate doesn't change.
If the actual unemployment rate falls below the natural unemployment rate, how does the actual inflation rate change? The actual inflation rate ________. A. doesn't change, but the short-run Phillips curve shifts leftward B. rises up along the short-run Phillips curve C. doesn't change, but the expected inflation rate rises D. rises and the natural unemployment rate falls
Inflation at lowest rate in 5 years Inflation rate (percent per year) In September, inflation in the United Kingdom fell to 1.1% a year, its lowest in 5 years. Analysts expected an inflation rate of 1.3% a year. 1.7- Source: The New York Times, October 13, 2009 With the unemployment rate at 8 percent and the natural unemployment rate at 6 percent, sketch the short-run Phillips curve and mark on your graph the point which shows the situation in September. Label the point A. 1.5- 1.3- The unemployment rate is 8 percent and the natural unemployment rate is 6 percent. 1.1- Draw a point that shows the unemployment rate and the inflation rate in September. Label it A. Draw a point that shows the natural unemployment rate and the expected inflation 0.9 rate. Label it B. 10 12 Unemployment rate (percent of labor force) Draw the short-run Phillips curve that is consistent with these data. Label it. >>> Draw only the objects specified in the question. Selected: Delete Clear none Next
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Using the Phillips curve: imagine a country is having a higher unemployment rate than usual for a longperiod of time (higher than the natural rate). What should happen in the short term and in the longterm?