Use the graphs below of two Phillips Curves to answer this question:Graph #1Inflation Rate (%)87650321002Graph #2Inflation Rate (%)98710+3.°•4Unemployment Rate (%)6210TT024681012Unemployment Rate (%)A. What does the Phillips Curve RepresentB. Explain why graph #2 is different from graph #1. Include the causes and solution in your answer.

A. The Phillips Curve The Phillips Curve represents an inverse relationship between the rate of…

Answered: Use the graphs below of two Phillips…

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 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
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The following graph shows 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. 12 SRPC 6:31 F 4/29/202 INFLATION RATE (Percent) 11 10 9 8 3 H CHIII I SRPC а J H a I
In the graph you've just explored, what is the inflation rate if the unemployment rate is 8 percent? _____ percent per year >>> Answer to 1 decimal place. Thanks Screenshot attached
If the current inflation rate is 10% and you are asked to predict the cost of decreasing it to 3% next year. 1)Will it result deflation policy or a disinflation policy? Why? 2) Give an estimate of the cost in terms of output assuming the sacrifice ratio is 4 and explain the economic cost of reducing inflation by drawing the Phillips curve. 3) If an economist says computing the cost of this policy using the sacrifice ratio is not totally correct because people are rational and they will take the new policy into account when forming expectations about the future. Explain this statement and the reason behind it by showing what happens the Phillips curve 4)if people update their expectations about the future instantaneously. How costly would it be to reduce inflation if the adjustment in expectations occurs instantaneously?
32 There is a new central bank president who wants low inflation much more than the previous president did. According to the Augmented Phillips Curve Model, in this situation, which of the following would be the most help in keep unemployment from rising in the sort run? a.People know the central bank president's true desires and believe he will stay in office for a long time b.Peoples' wage wage contracts are long-lasting. c.People know the central bank president's true desires and believe that he will only be in office for a short time. d.People think that the central bank president's desires are the same as the previous president's and believe that the new president will be in office for a short time. e.People think that the central bank president's desires are the same as the previous president's and believe that the new president will be in office for a
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what is the mathematical representation for the problem of American onlines is concerned over low sales and announces special cuts in its fares this summer. The New York to New Angeles fare for example is reduced from $500 to $ 420. Does American Airlines think demand is elastic, unitary elastic or inelastic.?
Figure 17-5 Inflation rate (percent per year) 10% 5 0 Long-run Phillips curve 5.5% 7.5 Short-run Phillips curve Unemployment rate (percent)
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Phelps was suspicious of the tradeoff suggested by the Phillips curve. He thought that sensible, forward-looking people should not change their behavior just because the prices on all the price tags in the economy increased at 4% per year instead of at 2% per year. Phelps started his analysis by asking what determines the unemployment rate. One of the key points he recognized was that unemployment is the inevitable consequence of an economy in which some firms go out of business each month and some workers quit their jobs each month. Once a worker is out of a job, the individual will take some time searching for the next one. Consider the following scenario. Picture an economy with 100,000 workers in its labor force. The unemployment rate is simply the number of unemployed workers divided by the number of workers in the labor force. At the beginning of January, the unemployment rate is 4.76%, so 4,760 people in the labor force are unemployed. Suppose that in January, 10% of the workers…
Question 18 Suppose the economy currently has an inflation rate of 7%. Moreover, the slope of the economy's Phillips Curve is 1/2. Over the next 3 years, short-run output is +4 percent, O percent, and -2 percent. Based on this information you know that the inflation rate at the end of the third year is percent.

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