1.Suppose the Phillips curve is represented by the following equation: Tt-Tt-1 = 12-Ut. The natural rate of unemployment in this economy is? (show your working) 2.A $100 (real) billion increase in government spending, G will have which of the following effects in the medium run? 3.A reduction in unemployment insurance will cause the wS relation to shift down, explain why?

1.Suppose the Phillips curve is represented by the following equation: Tt-Tt-1 = 12-Ut. The natural rate of unemployment in this economy is? (show your working) 2.A $100 (real) billion increase in government spending, G will have which of the following effects in the medium run? 3.A reduction in unemployment insurance will cause the wS relation to shift down, explain why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 41CTQ: Unemployment rates have been higher in many European countries in recent decades than in the United...

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