Draw the short-run and long-run Phillips curve. Label three points representing a recessionary gap, and inflationary gap, and full employment output. Identify what happens to the short-run Phillips curve when there is a change in aggregate demand and when there is a change in aggregate supply.
Draw the short-run and long-run Phillips curve. Label three points representing a recessionary gap, and inflationary gap, and full employment output. Identify what happens to the short-run Phillips curve when there is a change in aggregate demand and when there is a change in aggregate supply.
Chapter17: The Philips Curve And Expetactions Theory
Section: Chapter Questions
Problem 1SQP
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Draw the short-run and long-run Phillips curve. Label three points representing a recessionary gap, and inflationary gap, and full employment output. Identify what happens to the short-run Phillips curve when there is a change in aggregate demand and when there is a change in aggregate supply .
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