In A)- D), fill in the missing words (one gap = one word). A) In an expansionary gap, actual output is than potential output, and inflation expectations will (sooner or later) which shifts the short-run Phillips curve (3p) B) In case of a negative demand shock, the aggregate demand curve shifts output inflation and unemployment (4p) C) In case of inflation and nominal wage rigidities, real wage costs which shifts the short-run aggregate supply curve (2p)

In A)- D), fill in the missing words (one gap = one word). A) In an expansionary gap, actual output is than potential output, and inflation expectations will (sooner or later) which shifts the short-run Phillips curve (3p) B) In case of a negative demand shock, the aggregate demand curve shifts output inflation and unemployment (4p) C) In case of inflation and nominal wage rigidities, real wage costs which shifts the short-run aggregate supply curve (2p)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph depicts the short-run and long-run Phillips curves (SRPC and LRPC) for a hypothetical economy in long-run macroeconomic equilibrium at point A, where the natural unemployment rate is 6% and the current inflation rate is 8% per year.
Kindly answer A-D. Thank you.
The Phillips curve shifts in response to changes in in a shock. production costs; supply the real interest rates; financial aggregate expenditure; spending production costs; spending such as the minimum wage changing, which results
Please answer both parts! macroeconomics; long-run. Thank you!
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.
The Economy in 2008 In the first half of June 2008 the effects of a housing and financial crisis and an increase in world prices of oil and foodstuffs were affecting the economy. Refer to The Economy in 2008. The short-run effects of the housing and financial crisis are shown by A) moving to the right along the short-run Phillips curve. moving to the left along the short-run Phillips curve. C) shifting the short-run Phillips curve right. shifting the short-run Phillips curve left.
Which of the following is vertical? a. neither the long-run Phillips curve nor the long-run aggregate supply curve b. both the long-run Phillips curve and the long-run aggregate supply curve c. the long-run Phillips curve, but not the long-run aggregate supply curve d. the long-run Phillips curve, but not the long-run aggregate supply curve
Which of the following is downward-sloping? a. both the long-run Phillips curve and the long-run aggregate-supply curve b. neither the long-run Phillips curve nor the long-run aggregate-supply curve c. the short-run Phillips curve, but not the long-run aggregate-supply curve d. the long-run Phillips curve, but not the long-run aggregate-supply curve
Kindly answer E-H. Thank you.
The following graphs show the state of an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phillips curves (LRPC and SRPC). PRICE LEVEL INFLATION RATE 0 3 LRAS 4 5 LRPC 9 AD O AD LRAS 6 12 UNEMPLOYMENT RATE (Percent) 15 SRPC 18 Ⓒ SRPC - LRPC
Which of the following is correct if there is a favorable supply shock? a. the short-run aggregate supply curve and the short-run Phillips curve both shift right. b. the short-run aggregate supply curve and the short-run Phillips curve both shift left. c. the short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right. d. the short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left.
In a certain economy, the Dynamic Aggregate Supply (DAS) line is represented by the function = - π₁ = Ę ₁ = ₁ π + α ( Y₁ − Ÿ) + D and the inflation expectations formation mechanism is adaptive, that is, E₁+1 Absent a supply shock (v₁ = 0), in a figure representing period t inflation rate, π, on the vertical axis, and period t output, Y₁, on the horizontal axis, the period t DAS line will pass through the pair of points, : OA. (-1) B. (α, Y) ○ C. (Y) D. (πt, Yt)