ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- I need help soon as possible please. I only have one hour to finish.arrow_forwardSuppose 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.arrow_forwardConsider 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 technologyarrow_forward
- 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.arrow_forwardA 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.arrow_forwardThe 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.arrow_forward
- 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?arrow_forwardAssume 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?arrow_forwardThe Phillips curve illustrates a trade-off between * Equity and efficiency Supply and demand Unemployment rate and inflation rate Unemployment rate and interest ratearrow_forward
- Assume that the federal government increases unemployment compensation, which of the following is the correct adjustment on the Phillips Curve Graph?arrow_forwardWhich of the following is true about the Phillips curve? The empirical relationship between unemployment and inflation in the US disappeared after the 1970s. This means that the theoretical Phillips curve does not represent the world well. For a researcher to identify the theoretical Phillips curve from empirical data, the economy must be subject to supply shocks. The empirical Phillips curve implies that a government must choose between either low unemployment and high inflation or high unemployment and low inflation. When inflation expectations adjust, the negative empirical correlation between inflation and unemployment might disappear.arrow_forwardThe following graphs show the state of an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phillips curves (LRPC and SRPC). PRICE LEVEL INFLATION RATE 0 3 LRAS 4 5 LRPC 9 AD O AD LRAS 6 12 UNEMPLOYMENT RATE (Percent) 15 SRPC 18 Ⓒ SRPC - LRPCarrow_forward
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