ZuoTi.Pro
Question

Question 6 For this question, assume that the Phillips curve equation is represented by the following equation: m,- -1 = (m + Z)-aut . Which of the following will cause a reduction in the natural rate of unemployment? an increase in m an increase in expected inflation O an increase in z an increase in actual inflation O an increase in α Question 7 1 pts For this question, assume that the Phillips curve equation is represented by the following equation: π,-m,-1 = (m + z)-aut . Which of the following will NOT cause an increase in the natural rate of unemployment? An increase in the expected rate of inflation a reduction in m
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

let plilips cuwe equa fn natiwal vata of Naw So, Mt2 rili Decrease whon Increases! So Ansiwes hs an Increase inw e correct- optimise, An increase,io the unemployment vate osr t se decvease in the inPla tion rata ovel time ihen ioflation has ben peisifant pensistant, ligh unenip logmenf vates ill kely be asseciatd ith weductons in the iola tion ve A veduchcn in the expected ila ho rate -trien ia tha natial al nemp loymet Hence the comect ophon is a Ner cause a reduc .. . An increase in e expected Yate at inelaten.

0 0
Add a comment
Know the answer?
Add Answer to:
Question 6 For this question, assume that the Phillips curve equation is represented by the following...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • For this question, assume that the Philips curve equation is represented by the following equation π,...

    For this question, assume that the Philips curve equation is represented by the following equation π, rate of unemployment? π, 1 m + z au, which of the following will NOT cause an increase in the natural O An increase in the expected rate of inflation O a reduction in m O an increase in α a reduction in z

  • For this question, assume that the Phillips curve equation is represented by the following equation: πt...

    For this question, assume that the Phillips curve equation is represented by the following equation: πt - πt-1= (μ + z) - αut. An increase in the unemployment rate will cause: A. an increase in the markup over labour costs B. a decrease in the markup over labour costs C. a decrease in the inflation rate over time D. an increase in the inflation rate over time E. none of the above

  • In the Phillips curve equation (πt - πt - 1 = (m + z) - ut...

    In the Phillips curve equation (πt - πt - 1 = (m + z) - ut , which of the following will cause a reduction in the current inflation rate? a. a reduction in the markup, m b. a reduction in the expected inflation rate c. an increase in the unemployment rate d. all of the options listed

  • 7) An increase in the price of oil will likely cause which of the following? A) increase the mark...

    7) An increase in the price of oil will likely cause which of the following? A) increase the markup in the Phillips curve equation B) increase the sum "m z" in the Phillips curve equation C) increase the natural rate of unemployment D) all of the above 8) Suppose the Phillips curve is represented by the following equation: -mt-1-0.2-2ut- Given this information, we know that the natural rate of unemployment in this economy is A) 1096. B) 20%. C) 6.5%....

  • 4. (2.5 PTS) Assume the following Phillips curve: where π is the inflation rate, π et...

    4. (2.5 PTS) Assume the following Phillips curve: where π is the inflation rate, π et is the expected inflation rate, ut the unemployment rate, un the natural rate of unemployment. The rule of expectations is π e.-π t-1 The economy is initially (t-0) in medium term equilibrium, with the unemployment rate equal to 10% and the inflation rate equal to 8%. a) Suppose the monetary authority decides to lower the inflation rate to 2%. It faces two options: i)...

  • 4. The Phillips curve is given by TI+ = TE + (m + 2) - aut....

    4. The Phillips curve is given by TI+ = TE + (m + 2) - aut. Rewrite this equation as a relation between the deviation of the unemployment rate from the natural rate, inflation, and expected inflation. How does the natural rate of unemployment vary with the mark-up m? How does the natural rate of un- employment vary with the catchall term z? Identify two important sources of vari- ation in the natural rate of unemployment across countries and across...

  • If the economy is at the point where the short-run Phillips curve intersects the long-run Phillips...

    If the economy is at the point where the short-run Phillips curve intersects the long-run Phillips curve, a. unemployment equals the natural rate and expected inflation equals actual inflation. b. unemployment is above the natural rate and expected inflation equals actual inflation. c. unemployment equals the natural rate and expected inflation is greater than actual inflation. d. None of the above is necessarily correct.

  • 3. Suppose that the Phillips curve is given by: It = TE + a - but,...

    3. Suppose that the Phillips curve is given by: It = TE + a - but, where is the inflation rate, Ti is the expected inflation, ut is the rate of unemployment and, a and b are two positive parameters. Suppose that a fraction 1 € (0,1) of wage contracts are indexed to inflation and Ti = litt + (1 - 1) Tt-1. (a) Derive the new equation for the Phillips curve. [2 marks] (b) Derive an algebraic expression for...

  • Question 5: Phillips Curve Let p, π, m and U denote actual inflation rate, expected inflation...

    Question 5: Phillips Curve Let p, π, m and U denote actual inflation rate, expected inflation rate, growth rate of money supply, and unemployment rate respectively. Suppose that the growth rate of money supply, m, is constant. The evolution of p, π and U is characterized by following equations: p − π = α − βU, α & β > 0. (1) π˙ = δ(p − π), 0 < δ < 1 & (2) U˙ = −µ(m − p), µ...

  • Assume that unemployment, u, is related to inflation, π, according to the following Phillips curve:

    Assume that unemployment, u, is related to inflation, π, according to the following Phillips curve: u = u − φ (π−πe), where u is the natural rate of unemployment and πe is the expected rate of inflation. Assume rational expectations and that the central bank’s preferences are given by the loss function L(u,π) =λu+π2, where λ denotes the weight that the central bank assigns unemployment.a. Suppose that φ = 1. Show what rate of inflation a central bank with λ...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT