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 GDP (Red); 1957:7-2015.14.
a. tends to be uncorrelated with the business cycle; b. tends to move up during expansions and down in contractions; c. tends to move down during expansions and up in contractions; d. tends to be constant.
Homework Answers
a) "C"
The Philip curve represents a trade off between the unemployment and the inflation, the SRPC is downward sloping and LRPC is a straight vertical line
b) "B" tends to move up during expansion and down in contraction. The answer is "B".
Add Answer to:
The Figure illustrates the expectations theory of the Phillips curve Short Run Statistical Trade-Off Versus Long Run No-...
2) The expectations theory of the Phillips curve explains shifts in empirically identified Phillips curves by...
2) The expectations theory of the Phillips curve explains shifts in empirically identified Phillips curves by shifts in a. the long-run unemployment rate. b. the trend real GDP growth rate. c. the expected ináation rate. d. the expected real GDP growth rate
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...
Figure 17-7 Inflation rate (percent per year) Long-run Phillips curve 10% 5 Short-run Phillips curve 0...
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...
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.
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation + 0.2 -...
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%...
Figure: Short-Run Phillips Curve Inflation rate LRPC 7 8% Unemployment rate SRPC2 SRPC Refer to Figure: Short-Run...
Figure: Short-Run Phillips Curve Inflation rate LRPC 7 8% Unemployment rate SRPC2 SRPC Refer to Figure: Short-Run Phillips Curve. The natural rate of unemployment is Ö Õ Ô
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.
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation +.2 -4*Unemployment Rate...
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.
a. Use the AD-AS model to derive the short run Phillips curve and show how policy...
a. Use the AD-AS model to derive the short run Phillips curve and show how policy can move the economy from a point with high inflation to appoint with low inflation. b. Use the AD-AS model to derive the long-run Phillips curve and show the short run and long run effect of a policy that has the goal of reducing the unemployment rate
6. The long-run effects of monetary policy Aa Aa The following graphs show an economy that is cur...
6. The long-run effects of monetary policy The following graphs show an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run (LR) and short-run (SR) Phillips curves. The point on each graph shows the economy's current position. According to the graphs, potential output in this economy is _______ and the natural rate of unemployment is _______ .Suppose the central bank of the economy decreases the...
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...
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...
Figure: Short-Run Phillips Curve Inflation rate LRPC 7 8% Unemployment rate SRPC2 SRPC Refer to Figure: Short-Run Phillips Curve. The natural rate of unemployment is Ö Õ Ô
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.
Most questions answered within 3 hours.
-
Suppose in the short run a firm’s production function is given
by Q = L1/2*K1/2, and...
asked 12 minutes ago -
Calculation of number of protons, neutrons , and electrons
If given the mass # of 74...
asked 14 minutes ago -
On the Apollo 14 mission to the moon, astronaut Alan Shepard hit
a golf ball with...
asked 26 minutes ago -
are primates eutherians?
i know eutherians come from therians but does primates come from
eutharia bc...
asked 31 minutes ago -
Calculate the specific heat of a certain unknown metal, if it
requires 195 joules of heat...
asked 42 minutes ago -
Identify the characteristics of a successful
project.
Describe the phases the project lifecycle.
Define the roles...
asked 51 minutes ago -
1. In Module 2 "headers" and "footers" are
described. Explain the difference between them and how...
asked 46 minutes ago -
Three polarizing filters are stacked with the polarizing axes of
the second and third at 58.5...
asked 55 minutes ago -
The capacitance in a series RCL circuit is C1 = 3.3 μF, and
the corresponding resonant...
asked 1 hour ago -
A 357.7-gram sample of an unknown substance (MM = 92.41 g/mol)
is heated from -23.1 °C...
asked 1 hour ago -
The project aims to design a network for a casino. The casino
has 10 floors including...
asked 1 hour ago -
Combustion of an unknown compound containing only carbon and
hydrogen produces 54.9 g of CO₂ and...
asked 1 hour ago