Answered: According to the short-run Phillips…

According to the short-run Phillips curve, when actual output is unemployment rate rises. above; increases above; decreases below; decreases below; increases potential output, the price level and the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

According to the short-run Phillips curve, when actual output is.
unemployment rate rises.
above; increases
above; decreases
below; decreases
below; increases
potential output, the price level and the

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Suppose that the economy of Marvelia is in the long-run equilibrium. The Marvelia government then considers reducing taxes. Show the impact of this policy on both the short-run and long-run Phillips curves. Also, explain the impact of this policy on the short-run and long-run unemployment rate.
Consider the original presentation of the Phillips Curve, with inflation on the vertical axis and unemployment on the horizontal axis. Which of the following could NOT shift this Phillips Curve upward? an increase in the price of inputs used in production expected higher prices in the future/higher inflation an increase in the average wages of workers an improvement in production technology
Derive the original Phillips curve and answer the following questions:a) What effect does an increase in the expected price level have on the price level?b) What effect does an increase in the unemployment rate have on the price level?c) What effect does a decrease in business competition have on inflation?d) What is the effect of liberalizing foreign trade?e) What effect does the formation of trade unions have?
If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy: A) is producing at its potential GDP. B) is producing at a point where output is more than potential GDP. C) is producing at its equilibrium point. D) is producing at a point where output is less than potential GDP.
The Short-Run Phillips Curve given by T = E (x) – 0.4 (u – 10) + v Suppose that the economy has adaptive expectations and no inflation shocks. If inflation goes down by 3.3 percentage points a year from today, what is the unemployment rate one year from now? Round your answer to the nearest two decimal place. Write your answer in percentage terms so if your answer is 10%, write 10.
A basis for the slope of the short-run Phillips curve is that when unemployment is high there are upward pressures on prices and downward pressures on wages. downward pressures on prices and upward pressures on wages. upward pressures on prices and wages. downward pressures on prices and wages.
The following graph depicts the short-run and long-run Phillips curves (SRPC and LRPC) for a hypothetical economy in long-run macroeconomic equilibrium at point A, where the natural unemployment rate is 6% and the current inflation rate is 8% per year.
Illustrate the effects of the following developments on Phillips curves. Give the economic reasoning underlying your answers. a) In order to increase the amount of highly skilled labour in Indonesia, the government decided to make an online training program. What will happen to the Phillips Curve?
Derive the Phillips Curve from the Short Run Aggregate Supply (SRAS) Curve and discuss the relevance of their relationship for the Ghanaian economy.
Assume that the economy self corrects to long-run equilibrium without a governmental policy. Which of the following is the correct adjustment on the Phillips Curve Graph?
The Phillips curve illustrates a trade-off between * Equity and efficiency Supply and demand Unemployment rate and inflation rate Unemployment rate and interest rate