In 2017, the natural unemployment rate is 7 percent and the expected inflation rate is 3 percent. Draw the long-run Phillips curve. Label it LRPC2017 Draw the short-run Phillips curve. Label it SRPC2017- In 2018, the inflation rate is expected to rise to 5 percent a year. Show the effect in the graph. Draw either a new SRPC curve labeled SRPC2018 or an arrow along the SRPC curve showing the direction of change.

In 2017, the natural unemployment rate is 7 percent and the expected inflation rate is 3 percent. Draw the long-run Phillips curve. Label it LRPC2017 Draw the short-run Phillips curve. Label it SRPC2017- In 2018, the inflation rate is expected to rise to 5 percent a year. Show the effect in the graph. Draw either a new SRPC curve labeled SRPC2018 or an arrow along the SRPC curve showing the direction of change.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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