On the following graph, shift the curve or drag the blue point along the curve, or do both, to show the long-run effects of the increase in the moneysupply.INFLATION RATE (Percent)UNEMPLOYMENT RATE (Percent)6In the long run, the increase in the money supply results in(relative to the economy's initial equilibrium).in the inflation rate andin the unemployment rate. 4. Monetary policy and the Phillips curvethe following oSuppose the central bank of the hypothetical economy decides to increase the money supply.On the following graph, shift the curve or drag the blue point along the curve, c do both, to show the short-run effects of this policy.Hint: You may assume that the central bank's move was unanticipated.unemployment rate.In the short run, an unexpected increase in the money supply results inin the inflation rate andin the2UNEMPLOYMENT RATE (Percent)a hypothetical economy. The given point on the graph indicates the initial rates ofAssume that the economy is currently in long-run equilibrium.360INFLATION RATE (Percent)SR Pips Curve.SR Phillips Curve

It can be defined as a form of graphical of the concept of economics which shows the rate of…

Answered: on the following graph, shift the curve…

on the following graph, shift the curve or drag the blue point along the curve, or do both, to show the long-run effects of the increase in the money supply INFLATION RATE (Percent

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

On the following graph, shift the curve or drag the blue point along the curve, or do both, to show the long-run effects of the increase in the money
supply.
INFLATION RATE (Percent)
UNEMPLOYMENT RATE (Percent)
6
In the long run, the increase in the money supply results in
(relative to the economy's initial equilibrium).
in the inflation rate and
in the unemployment rate.

4. Monetary policy and the Phillips curve
the following o
Suppose the central bank of the hypothetical economy decides to increase the money supply.
On the following graph, shift the curve or drag the blue point along the curve, c do both, to show the short-run effects of this policy.
Hint: You may assume that the central bank's move was unanticipated.
unemployment rate.
In the short run, an unexpected increase in the money supply results in
in the inflation rate and
in the
2
UNEMPLOYMENT RATE (Percent)
a hypothetical economy. The given point on the graph indicates the initial rates of
Assume that the economy is currently in long-run equilibrium.
3
6
0
INFLATION RATE (Percent)
SR Pips Curve
.
SR Phillips Curve

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