Complete the graph Inflation rate Unemployment rate (percentage) 12 (percent per year) 45 3 6. I FIGURE 15.1 1. The table above has data on the inflation rate and the unemployment rate. a. Using the data, label the axes and plot the short-run Phillips curve in Figure 15.1. Label the curve SRPC. b. What is the effect of a decrease in the unemployment rate from 8 percent to 5 percent? Show the effect in Figure 15.1. c. How does your answer to question (b) indicate the presence of a tradeoff?

Complete the graph Inflation rate Unemployment rate (percentage) 12 (percent per year) 45 3 6. I FIGURE 15.1 1. The table above has data on the inflation rate and the unemployment rate. a. Using the data, label the axes and plot the short-run Phillips curve in Figure 15.1. Label the curve SRPC. b. What is the effect of a decrease in the unemployment rate from 8 percent to 5 percent? Show the effect in Figure 15.1. c. How does your answer to question (b) indicate the presence of a tradeoff?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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28 In applying the Phillips Curve, if Congress enacts expansionary policies to reduce unemployment, the cost is Multiple Choice O O an increase in the inflation rate. a decrease in the inflation rate. an increase in productivity. a decrease in productivity.
Question 43 The idea behind the Phillips curve is that when the unemployment rate is low, wages will decrease to attract now works WHICH MINs Taist wage ill also increes tightness in the labor market raises wages but has little impact on prices all of the above none of the above
In the graph you've just explored, what is the inflation rate if the unemployment rate is 8 percent? ___ percent per year >>> Answer to 1 decimal place. Thank you
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Figure 35-6 Use the graph below to answer the following questions. Inflation Rate D A Curve 1 F U/ B Curve 2 Unemployment Rate Refer to Figure 35-6. Curve 2 is the a. long-run Phillips curve. b. short-run aggregate demand curve. c. short-run Phillips curve. d. long-run aggregate demand curve.
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.
Figure 17-5 Inflation rate (percent per year) 10% 5 0 Long-run Phillips curve 5.5% 7.5 Short-run Phillips curve Unemployment rate (percent)
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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?
Question 18 Suppose the economy currently has an inflation rate of 7%. Moreover, the slope of the economy's Phillips Curve is 1/2. Over the next 3 years, short-run output is +4 percent, O percent, and -2 percent. Based on this information you know that the inflation rate at the end of the third year is percent.