Eve is trying to calculate how much she should change her prices for physical therapy sessions for the coming year, if she expects inflation to be equal to 2.9% and estimates that GDP will be 5% smaller than potential output, by what amount should she increase her prices according to the attached Phillips curve? Unexpected inflation (Inflation-inflation expectations) 15 1% -2% -10% 596 Output gap (GDP sve to po GOP 2.996 1.9% $7.9% Phillips curva -5% 10% Output gap (GDP, relative to potential GDP) 0%

Eve is trying to calculate how much she should change her prices for physical therapy sessions for the coming year, if she expects inflation to be equal to 2.9% and estimates that GDP will be 5% smaller than potential output, by what amount should she increase her prices according to the attached Phillips curve? Unexpected inflation (Inflation-inflation expectations) 15 1% -2% -10% 596 Output gap (GDP sve to po GOP 2.996 1.9% $7.9% Phillips curva -5% 10% Output gap (GDP, relative to potential GDP) 0%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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> 325 Question 10 A rise in wages would raise cost of production and hence leads to A) a fall in the price level. B) demand-pull inflation C) no changes in the price level. D cost-push inflation Question 11 1080 100 e di OT n