Assume that the federal government increases unemployment compensation, which of the following is the correct adjustment on the Phillips Curve Graph? Movement downward along the existing short-run Phillips CurveMovement upward along the existing short-run Phillips CurveRightward shift of the short-run Phillips CurveLefttward shift of the short-run Phillips CurveRightward shift of the long-run Phillips CurveLeftward shift of the long-run Phillips Curve

if federal government increases unemployment compensation,then it decreases the unemployment level.…

Answered: Assume that the federal government…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that the federal government increases unemployment compensation, which of the following is the correct adjustment on the Phillips Curve Graph?

Movement downward along the existing short-run Phillips Curve
Movement upward along the existing short-run Phillips Curve
Rightward shift of the short-run Phillips Curve
Lefttward shift of the short-run Phillips Curve
Rightward shift of the long-run Phillips Curve
Leftward shift of the long-run Phillips Curve

Definition Definition Relationship between the rate of unemployment and the rate of inflation that shows that the lower the initial rate of unemployment, the greater the rise in wage rate corresponding to a given rise in the rate of unemployment. The Phillips curve assumes that the ratio between prices and nominal wage rates is constant in the short run. Presented graphically, the Phillips curve shows an inverse relationship between the rate of unemployment and the rate of inflation.

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