If the expected inflation rate increases by 10 percentage points, how do the short-run Phillips curve...
What is the Phillips curve used for? ( How do you use a Phillips curve to illustrate an unexpected change in inflation? If the expected inflation rate increases by 10 percentage points, how do the short-run Phillips curve and the long-run Phillips curve converge?
Problem 2 “The Business Cycle” (20 points) (4 pts) What is the Phillips curve used for? (8 pts) How do you use a Phillips curve to illustrate an unexpected change in inflation? (8 pts) If the expected inflation rate increases by 10 percentage points, how do the short-run Phillips curve and the long-run Phillips curve converge?
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation + 0.2 - 4*Unemployment Rate Assume that initially, people expect zero inflation. a)Draw the short run Phillips Curve and the long run Phillips Curve on a graph b)On the graph, represent what would happen in the short run if the government decided to run 4% inflation (setting inflation =0.04). c)On the graph, represent what would happen in the long run if the government decided to run 4%...
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation +.2 -4*Unemployment Rate Assume that initially, people expect zero inflation. Draw the short run Phillips Curve and the long run Phillips Curve on a graph On the graph, represent what would happen in the short run if the government decided to run 4% inflation (setting inflation =0.04). . On the graph, represent what would happen in the long run if the government decided to run 4% inflation.
An increase in expected inflation shifts the short-run Phillips curve right. a. b. short-run Phillips curve left. long-run Phillips curve right. C. d. long-run Phillips curve left. O Icon Key
11. How does a decrease in the expected rate of inflation shift the Phillips curves? a. It shifts both the short-run and long-run Phillips curves to the right. b. It shifts both the short-run and long-run Phillips curves to the left. It shifts only the short-run Phillips curve to the right. d. It shifts only the short-run Phillips curve to the left. in hou do the short-run Phillips curve and unemplo C.
Figure 17-7 Inflation rate (percent per year) Long-run Phillips curve 10% 5 Short-run Phillips curve 0 5.5% 7.5 Unemployment rate (percent) Refer to Figure 17-7. Consider the Phillips curves depicted in the graph above. The Fed announces its intention to decrease inflation from 10 percent to 5 percent per year, and it succeeds. If expectations of inflation are reduced to 8 percent by the Fed's announcement, the rate of unemployment will be _in the short run. less than 5.5 percent...
The short-run Phillips Curve assumes an unchanging Multiple Choice expected rate of inflation. fiscal or monetary policy actual rate of inflation. unemployment rate
4. The costs of inflation and of combating inflation The following graph shows a short-run Phillips curve for a hypothetical economy. Show the short-run effect of a contractionary monetary policy by dragging the point along the short-run Phillips curve (SRPC) or shifting the curve to the appropriate position. ? 12 11 10 SRPC 8 4 SRPC 3 2 1 0 1 4 5 UNEMPLOYMENT (Percent) INFLATION RATE Percent) Now, show the long-run effect of a contractionary monetary policy by dragging...
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.