**The Phillips Curve and the Natural Rate of Unemployment** The Phillips curve is expressed by: \[ \pi_t = \pi_t^e + (m + z) - \alpha u_t \] Rewrite this as a relation between the deviation of the unemployment rate from the natural rate, inflation, and expected inflation. Options: - A. \((u_t - u_n) = \alpha (\pi_t - \pi_t^e)\) - B. \((u_t - u_n) = \frac{\alpha}{\pi_t - \pi_t^e}\) - C. \((u_t - u_n) = \frac{\pi_t - \pi_t^e}{\alpha}\) - D. \((u_t - u_n) = \frac{\alpha}{\pi_t^e - \pi_t}\) In deriving the natural rate of unemployment, identify the condition on the price level and expected price level: Options: - A. Actual price level is unrelated to expected price level. - B. Actual price level is equal to expected price level. - C. Actual price level is less than expected price level. - D. Actual price level is greater than expected price level. Transforming the equation to show the natural rate of unemployment as \(\pi_t = \pi_t^e + (m + z) - \alpha u_t\): Options: - A. \(u_n = \alpha (m + z)\) - B. \(u_n = \frac{m + z}{\alpha}\) - C. \(u_n = \frac{m}{\alpha}\) - D. \(u_n = \frac{\alpha}{m}\) **Markup and the Natural Rate of Unemployment** How does the natural rate of unemployment vary with the markup? Options: - A. Natural rate increases when markup increases. - B. Either increase or decrease in markup causes a decrease in the natural rate. - C. Natural rate decreases when markup increases. - D. Natural rate is unaffected by markup. **Catchall Term 'z' and the Natural Rate of Unemployment** As 'z' increases, describe the effect on the natural rate: Options: - Increases - Decreases - Remains unchanged **Variation in the Natural Rate of Unemployment** Identify reasons for variations in the natural rate across countries and over time: Options: - A. Differences in 'm'
**The Phillips Curve and the Natural Rate of Unemployment** The Phillips curve is expressed by: \[ \pi_t = \pi_t^e + (m + z) - \alpha u_t \] Rewrite this as a relation between the deviation of the unemployment rate from the natural rate, inflation, and expected inflation. Options: - A. \((u_t - u_n) = \alpha (\pi_t - \pi_t^e)\) - B. \((u_t - u_n) = \frac{\alpha}{\pi_t - \pi_t^e}\) - C. \((u_t - u_n) = \frac{\pi_t - \pi_t^e}{\alpha}\) - D. \((u_t - u_n) = \frac{\alpha}{\pi_t^e - \pi_t}\) In deriving the natural rate of unemployment, identify the condition on the price level and expected price level: Options: - A. Actual price level is unrelated to expected price level. - B. Actual price level is equal to expected price level. - C. Actual price level is less than expected price level. - D. Actual price level is greater than expected price level. Transforming the equation to show the natural rate of unemployment as \(\pi_t = \pi_t^e + (m + z) - \alpha u_t\): Options: - A. \(u_n = \alpha (m + z)\) - B. \(u_n = \frac{m + z}{\alpha}\) - C. \(u_n = \frac{m}{\alpha}\) - D. \(u_n = \frac{\alpha}{m}\) **Markup and the Natural Rate of Unemployment** How does the natural rate of unemployment vary with the markup? Options: - A. Natural rate increases when markup increases. - B. Either increase or decrease in markup causes a decrease in the natural rate. - C. Natural rate decreases when markup increases. - D. Natural rate is unaffected by markup. **Catchall Term 'z' and the Natural Rate of Unemployment** As 'z' increases, describe the effect on the natural rate: Options: - Increases - Decreases - Remains unchanged **Variation in the Natural Rate of Unemployment** Identify reasons for variations in the natural rate across countries and over time: Options: - A. Differences in 'm'
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A5
![**The Phillips Curve and the Natural Rate of Unemployment**
The Phillips curve is expressed by:
\[ \pi_t = \pi_t^e + (m + z) - \alpha u_t \]
Rewrite this as a relation between the deviation of the unemployment rate from the natural rate, inflation, and expected inflation.
Options:
- A. \((u_t - u_n) = \alpha (\pi_t - \pi_t^e)\)
- B. \((u_t - u_n) = \frac{\alpha}{\pi_t - \pi_t^e}\)
- C. \((u_t - u_n) = \frac{\pi_t - \pi_t^e}{\alpha}\)
- D. \((u_t - u_n) = \frac{\alpha}{\pi_t^e - \pi_t}\)
In deriving the natural rate of unemployment, identify the condition on the price level and expected price level:
Options:
- A. Actual price level is unrelated to expected price level.
- B. Actual price level is equal to expected price level.
- C. Actual price level is less than expected price level.
- D. Actual price level is greater than expected price level.
Transforming the equation to show the natural rate of unemployment as \(\pi_t = \pi_t^e + (m + z) - \alpha u_t\):
Options:
- A. \(u_n = \alpha (m + z)\)
- B. \(u_n = \frac{m + z}{\alpha}\)
- C. \(u_n = \frac{m}{\alpha}\)
- D. \(u_n = \frac{\alpha}{m}\)
**Markup and the Natural Rate of Unemployment**
How does the natural rate of unemployment vary with the markup?
Options:
- A. Natural rate increases when markup increases.
- B. Either increase or decrease in markup causes a decrease in the natural rate.
- C. Natural rate decreases when markup increases.
- D. Natural rate is unaffected by markup.
**Catchall Term 'z' and the Natural Rate of Unemployment**
As 'z' increases, describe the effect on the natural rate:
Options:
- Increases
- Decreases
- Remains unchanged
**Variation in the Natural Rate of Unemployment**
Identify reasons for variations in the natural rate across countries and over time:
Options:
- A. Differences in 'm'](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f2307bf-bb1f-4b0a-815c-5d08e9e18518%2Fb5f13eeb-524b-4f65-9d12-486b56a6e3ae%2Fcvpddp_processed.png&w=3840&q=75)
Transcribed Image Text:**The Phillips Curve and the Natural Rate of Unemployment**
The Phillips curve is expressed by:
\[ \pi_t = \pi_t^e + (m + z) - \alpha u_t \]
Rewrite this as a relation between the deviation of the unemployment rate from the natural rate, inflation, and expected inflation.
Options:
- A. \((u_t - u_n) = \alpha (\pi_t - \pi_t^e)\)
- B. \((u_t - u_n) = \frac{\alpha}{\pi_t - \pi_t^e}\)
- C. \((u_t - u_n) = \frac{\pi_t - \pi_t^e}{\alpha}\)
- D. \((u_t - u_n) = \frac{\alpha}{\pi_t^e - \pi_t}\)
In deriving the natural rate of unemployment, identify the condition on the price level and expected price level:
Options:
- A. Actual price level is unrelated to expected price level.
- B. Actual price level is equal to expected price level.
- C. Actual price level is less than expected price level.
- D. Actual price level is greater than expected price level.
Transforming the equation to show the natural rate of unemployment as \(\pi_t = \pi_t^e + (m + z) - \alpha u_t\):
Options:
- A. \(u_n = \alpha (m + z)\)
- B. \(u_n = \frac{m + z}{\alpha}\)
- C. \(u_n = \frac{m}{\alpha}\)
- D. \(u_n = \frac{\alpha}{m}\)
**Markup and the Natural Rate of Unemployment**
How does the natural rate of unemployment vary with the markup?
Options:
- A. Natural rate increases when markup increases.
- B. Either increase or decrease in markup causes a decrease in the natural rate.
- C. Natural rate decreases when markup increases.
- D. Natural rate is unaffected by markup.
**Catchall Term 'z' and the Natural Rate of Unemployment**
As 'z' increases, describe the effect on the natural rate:
Options:
- Increases
- Decreases
- Remains unchanged
**Variation in the Natural Rate of Unemployment**
Identify reasons for variations in the natural rate across countries and over time:
Options:
- A. Differences in 'm'
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