Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 9, Problem 5E
(a)
To determine
Calculate the slope of the
(b)
To determine
Check which is the better option while consider the short-run output rather than inflation rate.
(c)
To determine
Check which is the better option while consider the inflation rate rather than short-run output.
(d)
To determine
The trade-off in terms of Phillips curve.
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Students have asked these similar questions
You observe the following short-run Phillips curve for the economy:
T = 9.2 -0.26(u - 6.5%) + v.
There are no supply shocks to the economy, and the actual unemployment rate is 6.5% (and will stay
that way for the foreseeable future).
What will expected inflation be next year? Write your answer as a percentage, and round at one (1)
decimal. Do not write the percentage sign. If you need more information to answer the question, write
"O".
Larry Summers, Professor of Economics at Harvard and ex-Treasury Secretary and Chief Economist at the World Bank, has been making lots of waves of late. He's expressed his fears that inflation would come in stronger than the Fed expected - he
was right -- and now he's predicting that there's
factoring in new trends like:
40% chance of a recession ahead as the Fed tightens to reduce inflationary pressures and higher wages force cutbacks in business output. Come up with your own forecast of the next year or two,
o supply chains issues (that seem to be easing, by the way)
• Fed policy that will turn contractionary
o a new $1.7 trillion infrastructure bill to be passed by Congresss
o continuation of the rising trend of worker retirements
o possible weakening of the dollar alongside rising tensions with Russia.
You're a pricing analyst for a manufacturing firm. You are tasked with predicting how average prices will change over the next
quarter to help your manager decide how to change her prices.
How might you find the best estimate of the likely inflation rate?
For the best estimate,
obtain the average forecast of many economists.
look to the financial markets.
analyze surveys of people's inflation expectations.
rely on the forecast of an eminent economist.
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