Watch the 2012 OpenLearn from The Open University video The Phillips Curve - 60 second adventures in economics and answer the following questions based on the video and your reading of the textbook: What is the Phillips Curve? Explain. Suppose the unemployment rate in Canada is very high. If the relationship depicted by the Phillips Curve is true, what could the hands-on approach to economic policy do to reduce unemployment? How would such a policy affect inflation? Explain why both unemployment and inflation rose in the 1970s. 2. Consider the following scenarios and briefly explain how each scenario would affect short-run aggregate supply (SAS), long-run aggregate supply (LAS) or aggregate demand (AD) in Canada. In some situations, more than one may be affected. Canada produces larger number of university graduates who possess higher levels of education and skill. Depletion of resources cause increase in the prices of key inputs in production. Canada’s trading partners experience higher rates of economic growth. Increase in oil prices raises the value of Canadian dollar. 3. Consider the following scenarios and briefly explain how each scenario would affect price level and real GDP in Canada. Canada’s major trading partners experience severe recession. Canadian dollar depreciates in the foreign exchange market. Major technological breakthroughs lead to significant increase in productivity.
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Watch the 2012 OpenLearn from The Open University video The
Phillips Curve - 60 second adventures in economics and answer the following questions based on the video and your reading of the textbook:-
What is the Phillips Curve? Explain.
-
Suppose the
unemployment rate in Canada is very high. If the relationship depicted by the Phillips Curve is true, what could the hands-on approach to economic policy do to reduce unemployment? How would such a policy affect inflation? -
Explain why both unemployment and inflation rose in the 1970s.
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2. Consider the following scenarios and briefly explain how each scenario would affect short-run
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Canada produces larger number of university graduates who possess higher levels of education and skill.
-
Depletion of resources cause increase in the prices of key inputs in production.
-
Canada’s trading partners experience higher rates of
economic growth . -
Increase in oil prices raises the value of Canadian dollar.
-
3. Consider the following scenarios and briefly explain how each scenario would affect price level and real GDP in Canada.
-
-
Canada’s major trading partners experience severe recession.
-
Canadian dollar depreciates in the foreign exchange market.
-
Major technological breakthroughs lead to significant increase in productivity.
-
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