Suppose you knew that the NAIRU (the non accelerating inflation rate of unemployment ) was 5.5...
Suppose you knew that the NAIRU (the non accelerating inflation rate of unemployment ) was 5.5 percent. The current unemployment rate is 5 percent.
a) Is an increase in government spending more likely to increase output or increase prices?
b) Now the unemployment rate rises to 6.5 percent , but the NAIRU stays the same. Is an increase in government more likely to increase output to to increase prices?
Homework Answers
Since the unemployment is already below NAIRU, an increase in government spending is more likely to increase increase prices.
Since the unemployment is above NAIRU, an increase in government spending is more likely to increase increase output and reduce unemployment.
Add Answer to:
Suppose you knew that the NAIRU (the non accelerating inflation
rate of unemployment ) was 5.5...
9 Suppose you knew that the NAIRU (the nonaccelerating inflation rate of rate is 3.5 percent....
9 Suppose you knew that the NAIRU (the nonaccelerating inflation rate of rate is 3.5 percent. nt) was 5 percent. The current unemployment a) An increase in government spending is more likely to increase output, not prices. prices, not output. prices and output neither prices, nor output. b) Now the unemployment rate rises to 6 percent, but the NAIRU stays the same. In this case, an increase in government spending is more likely to increase prices and output. Oneither prices,...
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...
Now, suppose there is an increase in government spending. How would this change inflation and unemployment...
Now, suppose there is an increase in government spending. How would this change inflation and unemployment rate? In other words, would inflation and unemployment rate increase or decrease as a result of an increase in government spending?
What happened to the inflation rate between the year when the unemployment rate was 5.5% and...
What happened to the inflation rate between the year when the
unemployment rate was 5.5% and the year when it was 4.5%?
The inflation rate decreased by 2 percentage points.
The inflation rate decreased from 1.9% to 1.5%.
The inflation rate increased by 0.5 percentage points.
The inflation rate increased from 4% to 5%.
The points on the graph represent observations along the U.S.
economy’s Phillips curve during the 1960s. If the inflation rate
had been 4% during the 1960s,...
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.
(21) The lowest rate of unemployment that does not create inflationary pressure is called the NERU:...
(21)
The lowest rate of unemployment that does not
create inflationary pressure is called the
NERU: Non-Expansionary Rate of
Unemployment
MUR: Minimal Unemployment
Rate
NAIRU: Non-Accelerating
Inflation Rate of Unemployment
NRU: Natural Rate of
Unemployment
(22)
The Marxian view of the business cycle is that economic
fluctuations occur because
capitalism must increase the
rate of exploitation of workers in order to increase profits.
consumers are not spending
enough to stimulate growth in the economy.
the government does...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
1. Inflation and unemployment. Suppose that the Phillips curve is given by: TI= +0.1 - 2ut...
1. Inflation and unemployment. Suppose that the Phillips curve is given by: TI= +0.1 - 2ut where = 077-1. Also, suppose that is initially equal to zero. (a) What is the natural rate of unemployment? Suppose that the rate of unemployment is initially equal to the natural rate. In year t, the authorities decide to bring the unemployment rate down to 3% and hold it there forever. (b) Determine the rate of inflation in years t, t+1, t +2, +...
Suppose you knew that there was going to be 25 percent inflation between now and five...
Suppose you knew that there was going to be 25 percent inflation between now and five years from now, and suppose you knew that the current minimum wage of $7.50 was only enough to get a family of three to 70 percent of the poverty line. In order to make the minimum wage earn enough to be at that poverty line in five years, the minimum wage in five years would have to be: Note from me: please please keep...
Attempts: 0 Keep the Highest: 0/1.6 10. Inflation and unemployment Suppose that the government believes the...
Attempts: 0 Keep the Highest: 0/1.6 10. Inflation and unemployment Suppose that the government believes the economy is not producing goods and services at its optimal level. In an attempt to stimulate the economy, the government increases the quantity of money in the economy by printing more money. This monetary policy change in prices induces firms to produce the economy's demand for goods and services, leading to product prices. In the short run, the ▼ goods and services. This, in...
9 Suppose you knew that the NAIRU (the nonaccelerating inflation rate of rate is 3.5 percent. nt) was 5 percent. The current unemployment a) An increase in government spending is more likely to increase output, not prices. prices, not output. prices and output neither prices, nor output. b) Now the unemployment rate rises to 6 percent, but the NAIRU stays the same. In this case, an increase in government spending is more likely to increase prices and output. Oneither prices,...
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...
What happened to the inflation rate between the year when the
unemployment rate was 5.5% and the year when it was 4.5%?
The inflation rate decreased by 2 percentage points.
The inflation rate decreased from 1.9% to 1.5%.
The inflation rate increased by 0.5 percentage points.
The inflation rate increased from 4% to 5%.
The points on the graph represent observations along the U.S.
economy’s Phillips curve during the 1960s. If the inflation rate
had been 4% during the 1960s,...
(21)
The lowest rate of unemployment that does not
create inflationary pressure is called the
NERU: Non-Expansionary Rate of
Unemployment
MUR: Minimal Unemployment
Rate
NAIRU: Non-Accelerating
Inflation Rate of Unemployment
NRU: Natural Rate of
Unemployment
(22)
The Marxian view of the business cycle is that economic
fluctuations occur because
capitalism must increase the
rate of exploitation of workers in order to increase profits.
consumers are not spending
enough to stimulate growth in the economy.
the government does...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
1. Inflation and unemployment. Suppose that the Phillips curve is given by: TI= +0.1 - 2ut where = 077-1. Also, suppose that is initially equal to zero. (a) What is the natural rate of unemployment? Suppose that the rate of unemployment is initially equal to the natural rate. In year t, the authorities decide to bring the unemployment rate down to 3% and hold it there forever. (b) Determine the rate of inflation in years t, t+1, t +2, +...
Attempts: 0 Keep the Highest: 0/1.6 10. Inflation and unemployment Suppose that the government believes the economy is not producing goods and services at its optimal level. In an attempt to stimulate the economy, the government increases the quantity of money in the economy by printing more money. This monetary policy change in prices induces firms to produce the economy's demand for goods and services, leading to product prices. In the short run, the ▼ goods and services. This, in...
Most questions answered within 3 hours.
-
284 mL of a 0.52 M potassium hydroxide solution is added to 467
mL of a...
asked 5 minutes ago -
exercise on VSEPR and molecular structrue.
octahedral
SeCl62-
TeCl62-
ClF62-
distorted
SeF62–
IF6–
asked 7 minutes ago -
Little’s Law: Val d’Costa is a world famous ski village in the
French Alps. Because of...
asked 59 minutes ago -
Find the absolute error D for the calculation if A + B/C=D A=
9.4 +/- 0.4...
asked 1 hour ago -
New Air Heating and Cooling, manufactures furnaces and central
air units. The company pride itself on...
asked 1 hour ago -
A coach uses a new technique to train gymnasts. Seven
gymnasts were randomly selected and their...
asked 3 hours ago -
While rotating the tires on your car you notice a rock [mass =
0.1 Kg] stuck...
asked 5 hours ago -
Using MARS simulator, write MIPS programs according to
the following scenarios: Receive a positive integer number...
asked 7 hours ago -
An object in front of a concave mirror has a real image that is
11.5 cm...
asked 7 hours ago -
Consider the reaction, C3 H8 + O2 --> CO2 + H2O. How many
moles of O2...
asked 9 hours ago -
You and your opponent both roll a fair die. If you both roll the
same number,...
asked 9 hours ago -
In a study of the accuracy of fast food drive-through orders,
Restaurant A had 257 accurate...
asked 9 hours ago