Assume that the sacrifice ratio in the Philippines is 3, the unemployment rate is at its natural level, and inflation is presently at 6%. Assume further that the target inflation rate of the Bangko Sentral ng Pilipinas (BSP) is 3%. If the BSP wants to bring down inflation to 3%, then GDP must go down by how much (%)? b. Assuming that the Okun relationship in the Philippines is defined by the following equation: GDP growth: = 4.241 1.234 x (change in unemployment) Thus, if inflation is initially at 6%, unemployment ought to rise by percentage points if the BSP wants inflation to go down by 3 percentage points. ; ——

Assume that the sacrifice ratio in the Philippines is 3, the unemployment rate is at its natural level, and inflation is presently at 6%. Assume further that the target inflation rate of the Bangko Sentral ng Pilipinas (BSP) is 3%. If the BSP wants to bring down inflation to 3%, then GDP must go down by how much (%)? b. Assuming that the Okun relationship in the Philippines is defined by the following equation: GDP growth: = 4.241 1.234 x (change in unemployment) Thus, if inflation is initially at 6%, unemployment ought to rise by percentage points if the BSP wants inflation to go down by 3 percentage points. ; ——

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 8SQP

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Assume that the sacrifice ratio in the Philippines is 3, the unemployment rate is at its natural level, and inflation is presently at 6%. Assume further that the target inflation rate of the Bangko Sentral ng Pilipinas (BSP) is 3%. a. If the BSP wants to bring down inflation to 3%, then GDP must go down by how much (%)? J b. Assuming that the Okun relationship in the Philippines is defined by the following equation: GDP growth = 4.241 1.234 x (change in unemployment) Thus, if inflation is initially at 6%, unemployment ought to rise by points if the BSP wants inflation to go down by 3 percentage points — nercentage
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