Homework Help is Here – Start Your Trial Now!
Business
Economics
4. The long-run Phillips curve This graph shows the long-run Phillips curve (LRPC) and several of the short-run Phillips curves (PC) for an economy. INFLATION RATE (Percent) 12 15 PC, PC, PC, LRPC 2 3 4 B E + + H 5 UNEMPLOYMENT RATE (Percent) ? Assume that the economy is initially at point E, with an expected and actual rate of inflation of 6% and an unemployment rate of 5%. Which of the following events could lead the economy to move to point H in the short run? O The government increases spending. O Consumption spending rises. ONet exports increase. O The Fed raises interest rates. Which of the following statements would best explain a move from point H to point G? Nominal wages are renegotiated at the lower inflation rate of 3%, leading to an increase in employment. The government pursues a contractionary monetary policy.

4. The long-run Phillips curve This graph shows the long-run Phillips curve (LRPC) and several of the short-run Phillips curves (PC) for an economy. INFLATION RATE (Percent) 12 15 PC, PC, PC, LRPC 2 3 4 B E + + H 5 UNEMPLOYMENT RATE (Percent) ? Assume that the economy is initially at point E, with an expected and actual rate of inflation of 6% and an unemployment rate of 5%. Which of the following events could lead the economy to move to point H in the short run? O The government increases spending. O Consumption spending rises. ONet exports increase. O The Fed raises interest rates. Which of the following statements would best explain a move from point H to point G? Nominal wages are renegotiated at the lower inflation rate of 3%, leading to an increase in employment. The government pursues a contractionary monetary policy.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: The Short-run Trade-off Between Inflation And Unemployment
Section: Chapter Questions
Problem 1PA
See similar textbooks
icon
Related questions
Question
4. The long-run Phillips curve This graph shows the long-run Phillips curve (LRPC) and several of the short-run Phillips curves (PC) for an economy. INFLATION RATE (Percent) 12 PC PC PC LRPC 15 1 21 3 B + D E +° + +2 G + 5 6 UNEMPLOYMENT RATE (Percent) ? Assume that the economy is initially at point E, with an expected and actual rate of inflation of 6% and an unemployment rate of 5%. Which of the following events could lead the economy to move to point H in the short run? The government increases spending. O Consumption spending rises. Net exports increase. The Fed raises interest rates. Which of the following statements would best explain a move from point H to point G? Nominal wages are renegotiated at the lower inflation rate of 3%, leading to an increase in employment. The government pursues a contractionary monetary policy.
Transcribed Image Text:4. The long-run Phillips curve This graph shows the long-run Phillips curve (LRPC) and several of the short-run Phillips curves (PC) for an economy. INFLATION RATE (Percent) 12 PC PC PC LRPC 15 1 21 3 B + D E +° + +2 G + 5 6 UNEMPLOYMENT RATE (Percent) ? Assume that the economy is initially at point E, with an expected and actual rate of inflation of 6% and an unemployment rate of 5%. Which of the following events could lead the economy to move to point H in the short run? The government increases spending. O Consumption spending rises. Net exports increase. The Fed raises interest rates. Which of the following statements would best explain a move from point H to point G? Nominal wages are renegotiated at the lower inflation rate of 3%, leading to an increase in employment. The government pursues a contractionary monetary policy.
INFLATION RATE + D ++ G + H 3 5 B E UNEMPLOYMENT RATE (Percent) Assume that the economy is initially at point E, with an expected and actual rate of inflation of 6% and an unemployment rate of 5%. Which of the following events could lead the economy to move to point H in the short run? The government increases spending. Consumption spending rises. Net exports increase. O The Fed raises interest rates. Which of the following statements would best explain a move from point H to point G? Nominal wages are renegotiated at the lower inflation rate of 3%, leading to an increase in employment. The government pursues a contractionary monetary policy. Nominal wages are renegotiated at the higher inflation rate of 9%, leading to an increase in unemployment. The government pursues an expansionary fiscal policy. Which of the following statements is correct? The long-run Phillips curve illustrates the temporary tradeoff between unemployment and inflation. The long-run Phillips curve shows the positive relationship between unemployment and inflation in the long run. In the long run, changes in the inflation rate have no effect on unemployment. The long-run unemployment rate is 3%.
Transcribed Image Text:INFLATION RATE + D ++ G + H 3 5 B E UNEMPLOYMENT RATE (Percent) Assume that the economy is initially at point E, with an expected and actual rate of inflation of 6% and an unemployment rate of 5%. Which of the following events could lead the economy to move to point H in the short run? The government increases spending. Consumption spending rises. Net exports increase. O The Fed raises interest rates. Which of the following statements would best explain a move from point H to point G? Nominal wages are renegotiated at the lower inflation rate of 3%, leading to an increase in employment. The government pursues a contractionary monetary policy. Nominal wages are renegotiated at the higher inflation rate of 9%, leading to an increase in unemployment. The government pursues an expansionary fiscal policy. Which of the following statements is correct? The long-run Phillips curve illustrates the temporary tradeoff between unemployment and inflation. The long-run Phillips curve shows the positive relationship between unemployment and inflation in the long run. In the long run, changes in the inflation rate have no effect on unemployment. The long-run unemployment rate is 3%.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Shifts in Phillips Curve
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Brief Principles of Macroeconomics (MindTap Cours…
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781305971509
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
SEE MORE TEXTBOOKS