When you graph the Phillips curve, what goes on the y-axis? Change in inflation Rate of inflation Change in consumer price Change in short-run output
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- When you graph the
Phillips curve , what goes on the y-axis?- Change in inflation
- Rate of inflation
- Change in consumer price
- Change in short-run output
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- On a given short-run Phillips curve which of the following is held constant? a. the level of GDP b. employment c. the unemployment rate d. expected inflationWhat is Phillips curve How does it explain inflation?Increase of AD AS curve with the Phillips Curve (diagram) *dont just copy another wronganswer to reply me pls help me
- Using what you know about the Phillips curve, determine whether the following quantities will increase, decrease, or remain the same. a. Unemployment in the short run after an increase in inflation: (Click to select) v b. Unemployment in the long run after an increase in inflation: (Click to select) v c. Inflation in the short run after a decrease in unemployment: (Click to select) d. Inflation in the long run after a decrease in unemployment: (Click to select) |(Click to select) decrease increase remain the sameThe Phillips Curve and Inflation - End of Chapter Problem Recently, policy makers have debated whether an increase in the federal minimum wage, currently at $7.25 an hour, would be good for the economy. Determine how each of the given scenarios affects the Phillips curve. a. Policy makers announce that effective next week, the federal minimum wage will be $15 an hour. This will cause the Phillips curve to shift upward b. Policy makers announce that the federal minimum wage will increase to $15 an hour over the next 10 years by annual the Phillips curve to shift upward increases of $0.78. This will cause c. Explain how the initial increase in the federal minimum wage for low-wage earners could lead to a wage-price spiral throughout the economy. The increase in wages increases disposable income. This in turn leads to greater demand, which in turn results in higher prices.The following graphs show the state of an economy that is currently in Tong-run equilibrium. The first graph shows the aggregate demănd (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phìllips curves (LRPC and SRPC). LRAS AD LRAS AD 12 15 18 OUTPUT (Trillions af dollars) LRPC SRPC LRPC SRPC 10 12 UNEMPLOYMENT RATE (Percent) Which of the following statements are true based on these graphs? Check all that apply. - The current quantity of output is greater than potential output. The natural level of output is $9 trillion. - The unemployment rate is currently 6% higher than the natural rate of unemployment. Suppose the central bank of the economy increases the money supply. Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves. in the The long-run effect of the central bank's policy is inflation rate, real GDP. in the unemployment rate, and in INFLATION RATE
- The Phillips curve shows the relationship between inflation and what? A) Unemployment. B) The rate of price increases. C) The balance of trade. D) The rate of growth in an economy.Draw the short run phillips curve and long run phillips curve, explain why they are different?INFLATION RATE (Percent) 1 2 5. Expectations and the Phillips curve The following graph shows an economy in long-run equilibrium at point A (grey star symbol). The vertical line is the long-run Phillips curve (LRPC). The downward-sloping curve labeled SRPC is the short-run Phillips curve passing through point A. SRPC LRPC 0 0 1 2 3 4 5 6 7 8 UNEMPLOYMENT RATE (Percent) Which of the following is true along SRPC? O The expected inflation rate is 5%. The natural rate of unemployment is 3%. The actual unemployment rate is 6%. • } - * SRPC2 ㄢ C (?) Suppose that the Fed suddenly and unexpectedly decreases the money supply in an effort to reduce inflation. As a result of this unanticipated action, actual inflation falls to 3%. On the previous graph, use the black point (plus symbol) to illustrate the short-run effects of this policy. Now, suppose that-after a period of 3% inflation-households and firms begin to expect that the inflation rate will continue to be 3%. On the previous graph, use…
- What is the Phillips Curve, and how does it relate to the trade-off between inflation and unemployment?Suppose oil prices rise what happens to the short-run Phillips curve?Draw a graph to illustrate the following:a. A Phillips Curve based on the assumption of a vertical longrun aggregate supply curveb. The effect of a change in inflationary expectations on a recently stable Phillips Curvec. Unemployment caused by a recently enacted minimum wage law
