Suppose the government misjudges the natural rate of unemployment to be much lower than it actually is, and thus undertakes expansionary fiscal and monetary policies to try to achieve the lower rate. Use the concept of the short-run Phillips Curve to explain why these policies might at first succeed. Use the concept of the long-run Phillips Curve to explain the long-run outcome of these policies.

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A: Hi! thanks for the question but as per the guidelines, we answer only one question at one time.…

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A: The Phillips curve is still the basic framework used by central banks to explain and anticipate…

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A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

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Q: Assume that the economy of Country X has an actual unemployment rate of 7%, a natural rate of…

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A: Phillips Curve shows the inverse relationship between inflation and unemployment rate given by A.W.…

Q: Draw a short run Phillips curve and show the slope of the curve and then explain what it implies for…

A: Since there are multiple questions posted, we will answer to only the first one.

Q: Explain why the Phillips Curve is drawn to show a positive relationship between aggregate output and…

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A: The philips curve is the downward sloping curve showing the relationship between the inflation rate…