EBK EXPLORING MACROECONOMICS
7th Edition
ISBN: 9780100546400
Author: Sexton
Publisher: YUZU
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Chapter 19, Problem 11P
To determine
To show:
The relationship between the long-run
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What is The Short-Run and Long-Run Phillips Curves?
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- What are some factors that might infuence the slope of the Phillips curve?arrow_forwardWhen you graph the Phillips curve, what goes on the y-axis? Change in inflation Rate of inflation Change in consumer price Change in short-run outputarrow_forwardHow does the short-run Phillips curve reflect an increase in the price of oil such as occurred in the early 1970s? as a leftward shift in the short-run Phillips curve as a rightward shift in the short-run Phillips curve as a downward movement along the short-run Phillips curve as an upward movement along the short-run Phillips curvearrow_forward
- Under the assumption of anticipated shocks, can policymakers exploit the Phillips curve relationship in the short-run? In the long run?arrow_forwardIf expected inflation decreases, does the short-run Phillips curve shift? If so, what direction does it shift? Does the long-run Phillips curve shift? If so, what direction does it shift?arrow_forwardSuppose that the economy of Marvelia is in the long-run equilibrium. Explain and show the condition using both the short-run and long-run Phillips curves.arrow_forward
- Derive the Phillips Curve from the Short Run Aggregate Supply (SRAS) Curve and discuss the relevance of their relationship for the Ghanaian economy.arrow_forwardThe 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_forwardChanges in inflation and unemployment, if inflation falls from 12 to 6 percent and unemployment increases, will we see changes in both the longrun and shortrun Phillips curves or just one of the curves? Explainarrow_forward
- favourable shock to aggregate supply, use the model of aggregate demand and aggregate supply to explain the effects of such a shock , how does it effect the phillips curve?arrow_forwardWould you expect to see long-run data trace out a stable downward-sloping Phillips curve?arrow_forwardWhat kind of changesin the economy might infuence the slope of the Phillips curve?arrow_forward
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