The Phillips curve represents the trade-off between: A. real GDP and inflation. B. unemployment and interest rates. C. inflation and unemployment. D. interest rates and real GDP. Economists and policymakers initially believed that the Phillips curve represented a structural relationship in the economy because they believed basic behavior of households and firms, regarding inflation and unemployment, would constantly change over long periods of time. remain unchanged constantly change

The Phillips curve represents the trade-off between: A. real GDP and inflation. B. unemployment and interest rates. C. inflation and unemployment. D. interest rates and real GDP. Economists and policymakers initially believed that the Phillips curve represented a structural relationship in the economy because they believed basic behavior of households and firms, regarding inflation and unemployment, would constantly change over long periods of time. remain unchanged constantly change

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Aggregate Supply

Section: Chapter Questions

Problem 1.1P

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A. What assumptions did Thomas Sargent make when he claimed that inflation is always and everywhere a fiscal phenomenon?" B. Why is it appropriate in the book's short-term model for the author to use the Phillips Curve as an Aggregate Supply curve? Does it capture the working of the labor market as well as an AS curve based, say, on sticky wages? C. Provide an example of the book's short-run model being based on "microfoundations."
The Phillips curve represents the trade-off between: A. real GDP and inflation. B. unemployment and interest rates. °c. inflation and unemployment. interest rates and real GDP. Economists and policymakers initially believed that the Phillips curve represented a structural relationship in the economy because they believed basic behavior of households and firms, regarding inflation and unemployment, would constantly change over long periods of time. remain unchanged constantly change
. Explain how the original Phillips curve was transformed into the expectations augmented Phillips curve. Using the latter, describe why any expansionary policy would not be effective in the long run and move the macro-economy back to the Natural Rate of Unemployment (NRU).
Consider a situation where the government implemented a successful program to train unemployed workers with new skills, find jobs suited to those new skills and help them relocate to the new jobs. a. What would be the impact of such a government expenditure (expansionary fiscal policy) on the short and long-run Phillips curve? b. Could an expansionary monetary policy achieve the same result?
1. Assume that the South African economy is at equilibrium where output is equal to the natural level of output. Now suppose there is an increase in unemployment benefits in the country. Use the IC-LM-PC model to graphically illustrate the effects of an increase in unemployment benefits on the labor market (the WS and PS curves), the goods and money markets (the IS and LM curves) and on the Phillips curve. In your answer illustrate the differences in what happens to output, inflation and real interest rate between the short-run (SR) and medium-run (MR).
What kind of changesin the economy might infuence the slope of the Phillips curve?
Which of the following policies in pro-cyclical? Select one: a. The Fed sells government bonds in an open market operation during a recession. b. Congress lowers government spending during an expansion. c. The Fed raises the discount rate during an expansion. d. Congress lowers income tax during a recession. e. Congress raises corporate taxes during an expansion.
IS-MP & Phillips Curvel a. Draw an economy in long-run equilibrium when the real interest rate is 3.5% using the IS-MP model as a function of the output gap. On the graph below, show the Phillips Curve as a function of the unemployment rate if the natural rate off unemployment is 4.6%. Label the initial equilibrium point A. b. Now show the effect of an increase in investment in the IS-MP and the Phillips Curve. Label this new equilibrium point B. IS-MP Phillips Curve (as a function of Unemployment)
How does the modern view of the Phillips curve differ from the earlier view? ___The early view of the Phillips curve suggested that the Phillips curve shifts with changes in inflation expectations. Such a view failed to recognize that the Phillips curve is a fixed inverse relationship between inflation and unemployment. ___The early view of the Phillips curve suggested that the Phillips curve is fixed, with higher rates of inflation associated with lower rates of unemployment, and vice versa. Such a view failed to recognize the importance of inflation expectations in determining the position of the short-run Phillips curve. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Assume that an economy has the Phillips curve Tt = T-1 - 0.5(u - 0.03). Then the natural rate of unemployment is: A) 0.12. B) 0.06. C) 0.5. D) 0.03. 9) Government debt equals the: A) difference between current government purchases and taxes. B) difference between saving and investment. C) sum of past budget deficits and surpluses. D) M1 money supply. 10) An estimate of what government spending and tax revenue would be if the economy were operating at its natural rate of output and employment is called the budget. A) cyclically adjusted B) inflation adjusted C) capital asset D) generational accounting I would appreciate it if you could write the answer to the question clearly and clearly. I would also like to state that I will give bad marks to questions that are incomplete. I will give the score as soon as the answer to the question comes. Also, l'd appreciate it if you could write it legibly.
In the New Keynesian model, how should the central bank change its target interest rate in responseto each of the following shocks? Use diagrams, and explain your results.a. There is a shift in money demand.b. Total factor productivity is expected to decrease in the future.c. Total factor productivity decreases in the present.
Because money growth is a major component determining the inflation rate, in order to forecast inflation we should forecast actions by the Office of the Treasury. Fed. President. U.S. Mint. Congress. Transfer payments include i. social security benefits ii. medicare and medicaid benefits iii. unemployment benefits i only. i and iii only. i, ii, and iii. iii only. ii only. When tax revenues ________ outlays is negative, then the government has a budget ________. minus; surplus plus; surplus minus; deficit divided by; surplus plus; deficit The government collects tax revenues of $100 million and has $105 million in outlays. The budget balance is a deficit of $105 million. surplus of $100 million and a deficit of $105 million. surplus of $5 million. deficit of $5 million. surplus of $105 million. Automatic changes in tax revenues and expenditures that occur as a result of fluctuations in real GDP are referred to as…