Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
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?
What happens in the Phillips Curve diagram when the AS curve shifts?
Does the Phillips curve have a positive or negative slope? Explain how this slope is derived. When will an increase in aggregate demand not result in lower unemployment rates in the short run?
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- What is stagflation? How may it affect the Phillips Curve? What policy measures may be taken to reduce stagflation?arrow_forwardWhat 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_forward
- How 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_forwardUnder 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_forward
- Suppose 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_forwardA movement to the right along a given short-run Phillips Curve could be caused by? Answer correctly please. Iarrow_forwardDerive the Phillips Curve from the Short Run Aggregate Supply (SRAS) Curve and discuss the relevance of their relationship for the Ghanaian economy.arrow_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_forwardUsing the equation explain what causes shifts in the Phillips curve and what causes movement along the curve.arrow_forward
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