Which of the following is a component of the structure of the short-run model?MP curveIS curvePhillips curveAll of the above

The IS Curve shows potential interest and income ratios along which the market for products is in…

Answered: Which of the following is a component…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following is a component of the structure of the short-run model?
1. MP curve
2. IS curve
3. Phillips curve
4. All of the above

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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