are my answers correct? The following graph plots a short-run Phillips curve for a hypothetical economy.Show the short-run effect of a contractionary monetary policy by dragging the point along the short-run Phillips curve (SRPC) or shifting the curve tothe appropriate position.INFLATION RATE (Percent)12111098co01321O12O34UNEMPLOYMENT (Percent)OSRPC56SRPC?Now, show the long-run effect of a contractionary monetary policy by dragging either the short-run Phillips curve (SRPC), the long-run Phillips curve(LRPC), or both. INFLATION RATE (Percent)12111098765st32100■1LRPC2++++SRPC₁34UNEMPLOYMENT (Percent)SRPC256A general decrease in purchasing powerDecreased variability of relative pricesSRPCLRPCAs anticipated, inflation falls and the short-run Phillips curve shifts downwardtemporary unemploymentWhich of the following examples represents a cost of inflation? Check all that apply.Ihighlighting the cost of fighting inflation, which isAn increase in shoe leather costs as consumers attempt to reduce their monetary holdingsA home goods store's need to change the price tags more frequently on items sold in the store

Monetary policy refers to the actions taken by a central bank or other monetary authority to control…

The following graph plots a short-run Phillips curve for a hypothetical economy. Show the short-run effect of a contractionary monetary policy by dragging the point along the short-run Phillips curve (SRPC) or shifting the curve to the appropriate position. INFLATION RATE (Percent) 12 11 10 9 8 4 10 5 3₂2 2 1 0 0 1 O 2 4 UNEMPLOYMENT (Percent) 3 SRPC 5 SRPC Now, show the long-run effect of a contractionary monetary policy by dragging either the short-run Phillips curve (SRPC), the long-run Phillips curve

The following graph plots a short-run Phillips curve for a hypothetical economy. Show the short-run effect of a contractionary monetary policy by dragging the point along the short-run Phillips curve (SRPC) or shifting the curve to the appropriate position. INFLATION RATE (Percent) 12 11 10 9 8 4 10 5 3₂2 2 1 0 0 1 O 2 4 UNEMPLOYMENT (Percent) 3 SRPC 5 SRPC Now, show the long-run effect of a contractionary monetary policy by dragging either the short-run Phillips curve (SRPC), the long-run Phillips curve

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter27: Issues In Macroeconomic Theory And Policy

Section: Chapter Questions

Problem 8P

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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.
4. Monetary policy and the Phillips curve The following graph shows the current short-run Phillips curve for a hypothetical economy; the point on the graph shows the initial unemployment rate and inflation rate. Assume that the economy is currently in long-run equilibrium. Suppose the central bank of the hypothetical economy decides to decrease the money supply. On the following graph, shift the short-run (SR) Phillips curve or drag the blue point along the curve, or do both, to show the short-run effects of this policy. Hint: You may assume that the central bank's move was unanticipated. INFLATION RATE (Percent) 8 5 3 N 1 0 0 3 9 SR Phillips Curve 8 12 UNEMPLOYMENT RATE (Percent) 15 18 In the short run, an unexpected decrease in the money supply results in unemployment rate. SR Phillips Curve in the inflation rate and in the
1. Problems and Applications Q1 Consider the following four situations: A. Actual inflation is 6 percent, and expected inflation is 6 percent. B. Actual inflation is 4 percent, and expected inflation is 6 percent. C. Actual inflation is 4 percent, and expected inflation is 4 percent. D. Actual inflation is 6 percent, and expected inflation is 4 percent.
The graph depicts a hypothetical economy's short-run Philips curve (SRPC). Please shift the SRPC to reflect what happens when expected inflation decreases by 2 percentage points. After the shift in SRPC, what is the unemployment rate if the public expects no inflation in the economy? % Inflation rate (%) -1 -2 0 7 6 SRPC 5 4 3 2 -3 0 1 2 3 4 5 6 7 8 0 10
What is the difference between demand- pull and cost-push inflation? Discuss two mechanisms that offer protection from the effects of inflation. Who may be helped by inflation? Who may be hurt?
what is meant by inflation? If you see a rise in the price of gasoline, is that inflation? Is that an example of inflation? How do economists define inflation? https://openstax.org/books/principles-finance/pages/3-2-macroeconomics
The following graph plots a short-run Phillips curve for a hypothetical economy. Show the short-run effect of a contractionary monetary policy by dragging the point along the short-run Phillips curve (SRPC) or shifting the curve to the appropriate position. Now, show the long-run effect of a contractionary monetary policy by dragging either the short-run Phillips curve (SRPC), the long-run Phillips curve (LRPC), or both. As anticipated, inflation (rises/falls) and the short-run Phillips curve shifts (downward/upward) , highlighting the cost of fighting inflation, which is (higher unemployment in the long run/temporary unemployment/lower unemployment) . Which of the following examples represents a cost of inflation? Check all that apply. -An unintended redistribution of wealth from borrowers to lenders -A general decrease in purchasing power -Increased variability of relative prices -A coffee shop’s costs to reprint its menu to reflect fluctuating prices
What is the difference between cost-push inflation and demand-pull inflation? Explain the demand-pull inflationary process.
Q10
What is stagflation? How may it affect the Phillips Curve? What policy measures may be taken to reduce stagflation?
Q. Explain why economists consider inflation at too high a level to be a bad thing.