Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 31, Problem 2MCQ
To determine
To show:
The shape of the long-run
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The long-run Phillips Curve describes:
The relationship between unemployment and inflation after expectations of inflation have had time to adjust to
experience.
O An increase in expected inflation will cause nominal wages to rise, shifting both SRAS and the Phillips Curve up.
That there is a predictable negative relationship between the output gap and the unemployment rate but it is not one to
one.
The negative short-run relationship between the unemployment rate and the inflation rate.
10) In the Phillips curve equation, which of the following will NOT cause a rise in the current inflation
rate?
A) a rise in the minimum wage, z
B) a rise in the expected inflation rate
C) a rise in the employment insurance, z
D) a drop in the markup, ?
E) a fall in the unemployment rate
2. Using the AS and AD, WS and PS and IS-LM graphs, illustrate and explain the short run and medium
run effects of a less stringent enforcement of existing antitrust legislation (Monopolist market power
increased). Explain what happens to P, Y, i, W/P, I and u.
What is the effect of an increase in aggregate demand on the short-run Phillips curve?
When aggregate demand increases, _______.
A.
the short-run Phillips curve shifts upward
B.
the short-run Phillips curve shifts downward
C.
a movement occurs upward along the short-run Phillips curve
D.
a movement occurs downward along the short-run Phillips curve
Chapter 31 Solutions
Foundations of Economics (8th Edition)
Ch. 31 - Prob. 1SPPACh. 31 - Prob. 2SPPACh. 31 - Prob. 3SPPACh. 31 - Prob. 4SPPACh. 31 - Prob. 5SPPACh. 31 - Prob. 6SPPACh. 31 - Prob. 7SPPACh. 31 - Prob. 8SPPACh. 31 - Prob. 9SPPACh. 31 - Prob. 10SPPA
Ch. 31 - Prob. 11SPPACh. 31 - Prob. 1IAPACh. 31 - Prob. 2IAPACh. 31 - Prob. 3IAPACh. 31 - Prob. 4IAPACh. 31 - Prob. 5IAPACh. 31 - Prob. 6IAPACh. 31 - Prob. 7IAPACh. 31 - Prob. 8IAPACh. 31 - Prob. 9IAPACh. 31 - Prob. 10IAPACh. 31 - Prob. 1MCQCh. 31 - Prob. 2MCQCh. 31 - Prob. 3MCQCh. 31 - Prob. 4MCQCh. 31 - Prob. 5MCQCh. 31 - Prob. 6MCQ
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Similar questions
- The Short Run Phillips Curve describes what? A predictable negative relationship between the output gap and the unemployment rate When the output gap is negative (a recessionary gap), the unemployment rate is above the natural rate. O A positive output gap implies an unemployment rate below the natural rate of unemployment. The negative short-run relationship between the unemployment rate and the inflation rate.arrow_forwardThe 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 0 3 1 LRAS 6 12 9 OUTPUT (Trillions of dollars) LRPC 4 UNEMPLOYMENT (Percent) 2 3 15 5 AD SRPC 18 6 AD LRAS SRPC LRPCarrow_forwardNote :Don't use chat botarrow_forward
- Please solve asap...........?arrow_forwardPlease answer ASAP. explain briefly how you got the answer. Will rate positively. :)arrow_forwardAccording to the figure below, 8. Rightward AS shifts cause leftward Phillips curve shifts PC, PC, 6. 2. 1. 2 3 4. 8. Unemployment Rate (percent) What inflation rate would occur if the unemployment rate were 7 percent, with Instructions: Round your responses to the nearest O5 percent (eg. 1.0, 15, 2 0) a. PC? b- PC2? Inflation Rate (percent) 3.arrow_forward
- If the actual unemployment rate falls below the natural unemployment rate, how does the actual inflation rate change? The actual inflation rate ________. A. doesn't change, but the short-run Phillips curve shifts leftward B. rises up along the short-run Phillips curve C. doesn't change, but the expected inflation rate rises D. rises and the natural unemployment rate fallsarrow_forward2. Analyze the effects of the following developments on both the short-run and the long-run Phillips curves. Use the graphs and explain in detail: a) a rise in the natural rate of unemployment b) a substantial increase in the price of energyarrow_forward“Households decide to save a larger share of their income will shift aggregatedemand curve upward because higher saving will boost investment which inturn increase the demand for investment goods.” Do you agree with thestatement? Explain your choice. e. Graphically derive short run Phillips curve with the help of aggregate demand and supply model.arrow_forward
- Pls help with below homework. Select the correct option and explain it in 7-8 sentences.arrow_forwarder In 2017, nearly 3.5% of Vietnamese imports constituted of refined oil. If the price of oil rises significantly, what effect would this have on the Phillips curve in Vietnam? Real interest rate Unexpected inflation Decreased Interra Output gep cand Output gap Output gep Unexpected inflation ang costs Output gaparrow_forwardONLY G and E Please! I put the other page on there with A-D only for reference to the economic situation.arrow_forward
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