Macroeconomics for Today
10th Edition
ISBN: 9780357161494
Author: Irvin B. Tucker
Publisher: Cengage Learning US
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Chapter 17, Problem 7SQ
To determine
The illustration of the long-run
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On a given short-run Phillips curve which of the following is held constant?
a.
the level of GDP
b.
employment
c.
the unemployment rate
d.
expected inflation
To say that the natural rate of unemployment changes over time is to say that
a.
the long-run Phillips curve shifts over time.
b.
the Federal Reserve influences the natural rate of unemployment over time.
c.
the aggregate demand curve shifts over time.
d.
the short-run Phillips curve shifts over time.
What relationship does the short-run Phillips curve show? The short-run Phillips curve shows a _______ relationship between the unemployment rate and the _______.
A. positive; interest rate
B. negative; interest rate
C. negative; inflation rate
D. positive; inflation rate
Thanks
Chapter 17 Solutions
Macroeconomics for Today
Ch. 17.3 - Prob. 1YTECh. 17.6 - Prob. 1YTECh. 17 - Prob. 1SQPCh. 17 - Prob. 2SQPCh. 17 - Prob. 3SQPCh. 17 - Prob. 4SQPCh. 17 - Prob. 5SQPCh. 17 - Prob. 6SQPCh. 17 - Prob. 7SQPCh. 17 - Prob. 8SQP
Ch. 17 - Prob. 9SQPCh. 17 - Prob. 1SQCh. 17 - Prob. 2SQCh. 17 - Prob. 3SQCh. 17 - Prob. 4SQCh. 17 - Prob. 5SQCh. 17 - Prob. 6SQCh. 17 - Prob. 7SQCh. 17 - Prob. 8SQCh. 17 - Prob. 9SQCh. 17 - Prob. 10SQCh. 17 - Prob. 11SQCh. 17 - Prob. 12SQCh. 17 - Prob. 13SQCh. 17 - Prob. 14SQCh. 17 - Prob. 15SQCh. 17 - Prob. 16SQCh. 17 - Prob. 17SQCh. 17 - Prob. 18SQCh. 17 - Prob. 19SQCh. 17 - Prob. 20SQ
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- What is the effect of an increase in aggregate demand on the short-run Phillips curve? When aggregate demand increases, _______. A. the short-run Phillips curve shifts upward B. the short-run Phillips curve shifts downward C. a movement occurs upward along the short-run Phillips curve D. a movement occurs downward along the short-run Phillips curvearrow_forwardIf the actual unemployment rate falls below the natural unemployment rate, how does the actual inflation rate change? The actual inflation rate ________. A. doesn't change, but the short-run Phillips curve shifts leftward B. rises up along the short-run Phillips curve C. doesn't change, but the expected inflation rate rises D. rises and the natural unemployment rate fallsarrow_forwardWhat is true along the long-run Phillips curve? A. A labor shortage exists. B. A tradeoff exists between the inflation rate and the unemployment rate. C. The economy is at full employment. D. The inflation rate equals the expected inflation rate and any unemployment rate is possible. th aht thanksarrow_forward
- The long−run Phillips curve is a ________ curve, and moving along the long−run Phillips curve an increase in the inflation rate is associated with ________ in the natural unemployment rate. A. horizontal; no change B. downward sloping; no change C. downward sloping; a decrease D. vertical; no change E. upward sloping; an increasearrow_forwardg. Shift the appropriate curve or curves to show the short-run and long-run adjustments. Then place the point for long-run equilibrium in its appropriate place. Phillips Curve LRPC Long-run equilibrium SRPC Unemployment Rate, u Inflation Rate, zarrow_forwardAn increase in worker productivity brought about by the introduction of new technology into the workplace willa. shift the long-run Phillips curve to the left.b. shift the long-run Phillips curve to the right.c. decrease aggregate demand, since workers will lose their jobs.d. cause the aggregate demand curve to become horizontal. Give proper explanations for the correct onearrow_forward
- What is true along the long-run Phillips curve? A. A labor shortage exists. B. A tradeoff exists between the inflation rate and the unemployment rate. C. The economy is at full employment. D. The inflation rate equals the expected inflation rate and any unemployment rate is possible.arrow_forward(a) What events of the 1970s and 1980s made economists believe that the shortrun relationship between inflation and unemployment was unstable (not fixed and permanent)? (b) Explain, using a diagram(s) and the concept of stagflation, the relationship between shifts in the SRAS curve and the position of the short-run Phillips curve.arrow_forwardThe Phillips curve started as an observed _____ correlation between the inflation rate and the _____. a) positive;unemployment rate b)negative;unemployment rate c)negative;nominal interest rate d)positive;nominal interest ratearrow_forward
- The following graphs show the state of an economy that is currently in Tong-run equilibrium. The first graph shows the aggregate demănd (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phìllips curves (LRPC and SRPC). LRAS AD LRAS AD 12 15 18 OUTPUT (Trillions af dollars) LRPC SRPC LRPC SRPC 10 12 UNEMPLOYMENT RATE (Percent) Which of the following statements are true based on these graphs? Check all that apply. - The current quantity of output is greater than potential output. The natural level of output is $9 trillion. - The unemployment rate is currently 6% higher than the natural rate of unemployment. Suppose the central bank of the economy increases the money supply. Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves. in the The long-run effect of the central bank's policy is inflation rate, real GDP. in the unemployment rate, and in INFLATION RATEarrow_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_forwardQuestion 16 In the Phillips Curve diagram below, the economy is currently at its non- accelerating inflation rate of unemployment with an inflation rate of L. Inflation (%) ABCD L M 0 S LRPC SRPC2 SRPC1 NAIRU T Unemployment (%) Which one of the following is least likely to reduce the non-accelerating inflation rate of unemployment? Measures to increase the mobility of labour Measures to improve the availability of job information An increase in spending on education and training A rise in aggregate demandarrow_forward
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