If the actual unemployment rate is below the natural rate of unemployment, it would be expected...
If the actual unemployment rate is below the natural rate of unemployment, it would be expected that:
Group of answer choices
the natural rate of unemployment would fall
the Phillips curve would shift to the left
the rate of inflation would increase
wages would fall
Homework Answers
When actual GDP is equal to potential GDP the actual unemployment will be equal to natural rate. A decrease in unemployment rate below natural rate means that the real GDP increase beyond potential due to higher demand and which results in higher price or inflation. In short when actual unemployment is below the natural rate the rate of inflation will increase.
C. the rate of inflation would increase.
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If the actual unemployment rate is below the natural rate of
unemployment, it would be expected...
So let's say that this European Central Bank, the European Central Bank expects the natural unemployment rate to be 6 percent, and the actual unemployment rate is 5.5 percent. A.) Use the Phillips curve illustration to determine what happens to inflation
So let's say that this European Central Bank, the European Central Bank expects the natural unemployment rate to be 6 percent, and the actual unemployment rate is 5.5 percent.A.) Use the Phillips curve illustration to determine what happens to inflation and unemployment over a long period of time.B.) Assuming the expectation is the actual natural unemployment rate (5.5%), then if the government decides to increase government spending, please briefly explain and use the Phillips curve to illustrate.
In the long run, the Phillips Curve shows that a. the natural rate of unemployment is...
In the long run, the Phillips Curve shows that a. the natural rate of unemployment is independent of fiscal and monetary policy changes. b. unemployment and inflation have a direct relationship. c. an increase in unemployment leads to an increase in inflation. d. there is an inverse relationship between inflation and unemployment. e. unemployment increases when inflation decreases.
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...
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...
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...
The natural rate of unemployment rate is 6%. The present unemployment rate is 5%. As time...
The natural rate of unemployment rate is 6%. The present unemployment rate is 5%. As time passes, we would expect the O short-run aggregate demand curve to shift to the right. O short-run aggregate demand curve to shift to the left. O short-run aggregate supply curve to shift to the left. O short-run aggregate supply curve to become steeper.
Question 11 1 pts The unemployment rate is 6% and the natural rate of unemployment is...
Question 11 1 pts The unemployment rate is 6% and the natural rate of unemployment is 3%. Potential output is $ 100. Using the slope coefficients for the Phillips Curve and/or for Okun's Law from the textbook, calculate actual output (in $)?
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...
Consider the following statements a. A fall in expected inflation will shift the long-run Phillips curves...
Consider the following statements a. A fall in expected inflation will shift the long-run Phillips curves to the left. b. A fall in expected inflation will shift the short-run Phillips curve to the left. c. An increase in expected inflation will leave the long-run Phillips curve unaffected. d. An increase in unanticipated inflation will change the distribution of income in the economy 1 Only (a) is correct 2 Both (c) and (d) are correct 3 (b) (c) and (d) are...
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. 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...
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...
The natural rate of unemployment rate is 6%. The present unemployment rate is 5%. As time passes, we would expect the O short-run aggregate demand curve to shift to the right. O short-run aggregate demand curve to shift to the left. O short-run aggregate supply curve to shift to the left. O short-run aggregate supply curve to become steeper.
Question 11 1 pts The unemployment rate is 6% and the natural rate of unemployment is 3%. Potential output is $ 100. Using the slope coefficients for the Phillips Curve and/or for Okun's Law from the textbook, calculate actual output (in $)?
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...
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