Homework Answers
Answer : The answer is option A.
If inflation decrease responsiveness to unemployment then the Philips curve become flatter than before. But the Philips curve will not shift. Therefore, option A is correct.
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Suppose the Phillips Curve is an accurate depiction of the inflation/unemployment trade off. Assume there are...
Which of the following is true? An increase in structural unemployment shifts the Phillips curve to...
Which of the following is true? An increase in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve down. 0 An increase in structural unemployment shifts the Phillips curve to the right and an increase in inflation expectations shifts the Phillips curve down. 0 An increase in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve up. O An increase...
The Phillips curve shows the trade off between inflation and unemployment - what measures should/could be...
The Phillips curve shows the trade off between inflation and unemployment - what measures should/could be taken to move the Phillips curve to the left (inwards) . Refer to "Supply side economics" - do we still believe in the trade off between inflation and unemployment?
Question 10 1 pts Which of the following is true? in structural unemployment shifts the Phillips...
Question 10 1 pts Which of the following is true? in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve down An increase in structural unemployment shifts the Phillips curve to the right and an increase in inflation expectations shifts the Phillips curve down. An increase in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve up. An increase in...
3. Discuss the relationship between the natural rate of unemployment, Un, and the Phillips curve, 1lt...
3. Discuss the relationship between the natural rate of unemployment, Un, and the Phillips curve, 1lt – itt-1 = -a(ut – Un); and explain why the natural rate of unemployment is also known as the non-accelerating inflation rate of unemployment (NAIRU). Hints: The central assumption used to derive the Phillips curve, Tet – 1lt-1 = -a(Ut – Un), was that tę = Tt-1, where tę represents expected inflation. What does this mean? Assume that Ut = Un. What happens to...
The short-run trade-off between the rate of inflation and the unemployment rate is best represented by:
The short-run trade-off between the rate of inflation and the unemployment rate is best represented by: A. the long-run aggregate supply curve. B. the aggregate demand curve. C. the short-run aggregate supply curve. D. the Phillips curve.
Consider the short-run and long-run Phillips Curves illustrated in the figure below. Assume consumers have a...
Consider the short-run and long-run Phillips Curves illustrated in the figure below. Assume consumers have a daptive expectations. Suppose the inflation rate has been 15 percent for the past four years. The unemployment rate is currently at the natural rate of unemployment of 5 percent. The Federal Reserve decides that it wants to permanently reduce the inflation rate to 5 percent and uses monetary policy to do so. Describe the new short-run Phillips Curve with adaptive expectations. PC- PC- Inflation...
The Figure illustrates the expectations theory of the Phillips curve Short Run Statistical Trade-Off Versus Long Run No-...
The Figure illustrates the expectations theory of the Phillips
curve
Short Run Statistical Trade-Off Versus Long Run
No-Tradeoff;.
This theory states that
a. increasing the inflation rate causes a lower unemployment
rate in the long run; 4 b. Phillips curves shift when the real GDP
growth increases; c. short-run Phillips curves slope downwards
& the long-run Phillips curve is vertical; d. all of the
above.
. The US civilian labor force participation rate
US Labor Force Participation Rate (Blue); Real...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World War II, empirical economists noticed that, in many advanced economies, as unemployment fell, inflation tended to rise, and vice versa. The inverse relationship between unemployment and Inflation, was depicted as the Phillips curve, after William Phillips of the London School of Economics. In the 1950s and 1960s, the Phillips curve convinced many policy makers that they could use the relationship to pick acceptable levels...
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...
If the Bank of Canada were to miscalculate the NAIRU (non-accelerating inflation rate of unemployment) as...
If the Bank of Canada were to miscalculate the NAIRU (non-accelerating inflation rate of unemployment) as being 10% when in fact it was 12%, it might cause O A. consumers to spend more than they intended, because the Bank of Canada misled them about the unemployment rate. O B. a reduction in the natural rate of unemployment, because it would be allowing inflation to occur. O c. a one-time reduction in unemployment, because of a one-time increase in the money...
Which of the following is true? An increase in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve down. 0 An increase in structural unemployment shifts the Phillips curve to the right and an increase in inflation expectations shifts the Phillips curve down. 0 An increase in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve up. O An increase...
Question 10 1 pts Which of the following is true? in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve down An increase in structural unemployment shifts the Phillips curve to the right and an increase in inflation expectations shifts the Phillips curve down. An increase in structural unemployment shifts the Phillips curve to the left and an increase in inflation expectations shifts the Phillips curve up. An increase in...
3. Discuss the relationship between the natural rate of unemployment, Un, and the Phillips curve, 1lt – itt-1 = -a(ut – Un); and explain why the natural rate of unemployment is also known as the non-accelerating inflation rate of unemployment (NAIRU). Hints: The central assumption used to derive the Phillips curve, Tet – 1lt-1 = -a(Ut – Un), was that tę = Tt-1, where tę represents expected inflation. What does this mean? Assume that Ut = Un. What happens to...
Consider the short-run and long-run Phillips Curves illustrated in the figure below. Assume consumers have a daptive expectations. Suppose the inflation rate has been 15 percent for the past four years. The unemployment rate is currently at the natural rate of unemployment of 5 percent. The Federal Reserve decides that it wants to permanently reduce the inflation rate to 5 percent and uses monetary policy to do so. Describe the new short-run Phillips Curve with adaptive expectations. PC- PC- Inflation...
The Figure illustrates the expectations theory of the Phillips
curve
Short Run Statistical Trade-Off Versus Long Run
No-Tradeoff;.
This theory states that
a. increasing the inflation rate causes a lower unemployment
rate in the long run; 4 b. Phillips curves shift when the real GDP
growth increases; c. short-run Phillips curves slope downwards
& the long-run Phillips curve is vertical; d. all of the
above.
. The US civilian labor force participation rate
US Labor Force Participation Rate (Blue); Real...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World War II, empirical economists noticed that, in many advanced economies, as unemployment fell, inflation tended to rise, and vice versa. The inverse relationship between unemployment and Inflation, was depicted as the Phillips curve, after William Phillips of the London School of Economics. In the 1950s and 1960s, the Phillips curve convinced many policy makers that they could use the relationship to pick acceptable levels...
If the Bank of Canada were to miscalculate the NAIRU (non-accelerating inflation rate of unemployment) as being 10% when in fact it was 12%, it might cause O A. consumers to spend more than they intended, because the Bank of Canada misled them about the unemployment rate. O B. a reduction in the natural rate of unemployment, because it would be allowing inflation to occur. O c. a one-time reduction in unemployment, because of a one-time increase in the money...
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