Suppose that = T°, and the Phillips curve equation for the economy is below: T = 4.5%-0.2u, If inflation (7,) is 3.5%, then u,, is 22.5 %. v tend to decrease If the actual unemployment rate in this economy is equal to 6%, the rate of inflation wi tend to increase be zero remain constant
Suppose that = T°, and the Phillips curve equation for the economy is below: T = 4.5%-0.2u, If inflation (7,) is 3.5%, then u,, is 22.5 %. v tend to decrease If the actual unemployment rate in this economy is equal to 6%, the rate of inflation wi tend to increase be zero remain constant
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose that = 1° , and the Phillips curve equation for the economy is below:
T = 4.5% - 0.2u,
If inflation (T,) is 3.5%, then u, is 22.5 %.
v tend to decrease
If the actual unemployment rate in this economy is equal to 6%, the rate of inflation wi
tend to increase
be zero
remain constant
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