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6. Expectations and the modern view of the Phillips curve The following graph shows the short-run Phillips curve within the expectations framework. On the graph, place the grey star point to illustrate the situation when people accurately anticipate the inflation rate. 3 ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) Ń N T بن 1 4 2 3 UNEMPLOYMENT RATE (Percent) 5 True 6 False When people accurately anticipate the inflation rate, the natural rate of unemployment is When people underestimate inflation, the resulting unemployment rate is Correct expectations ++ On the previous graph, place the black cross point to illustrate the situation when people overestimate inflation by 1%. (?) True or False: The modern view of the Phillips curve indicates that to keep the unemployment rate low, policymakers should follow policies consistent with low and steady inflation. the natural rate.

6. Expectations and the modern view of the Phillips curve The following graph shows the short-run Phillips curve within the expectations framework. On the graph, place the grey star point to illustrate the situation when people accurately anticipate the inflation rate. 3 ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) Ń N T بن 1 4 2 3 UNEMPLOYMENT RATE (Percent) 5 True 6 False When people accurately anticipate the inflation rate, the natural rate of unemployment is When people underestimate inflation, the resulting unemployment rate is Correct expectations ++ On the previous graph, place the black cross point to illustrate the situation when people overestimate inflation by 1%. (?) True or False: The modern view of the Phillips curve indicates that to keep the unemployment rate low, policymakers should follow policies consistent with low and steady inflation. the natural rate.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: The Short-run Trade-off Between Inflation And Unemployment
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6. Expectations and the modern view of the Phillips curve The following graph shows the short-run Phillips curve within the expectations framework. On the graph, place the grey star point to illustrate the situation when people accurately anticipate the inflation rate. ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) w 1 4 UNEMPLOYMENT RATE (Percent) 3 O True 5 When people accurately anticipate the inflation rate, the natural rate of unemployment is False When people underestimate inflation, the resulting unemployment rate is Correct expectations On the previous graph, place the black cross point to illustrate the situation when people overestimate inflation by 1%. (?) %. the natural rate. True or False: The modern view of the Phillips curve indicates that to keep the unemployment rate low, policymakers should follow policies consistent with low and steady inflation.
Transcribed Image Text:6. Expectations and the modern view of the Phillips curve The following graph shows the short-run Phillips curve within the expectations framework. On the graph, place the grey star point to illustrate the situation when people accurately anticipate the inflation rate. ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) w 1 4 UNEMPLOYMENT RATE (Percent) 3 O True 5 When people accurately anticipate the inflation rate, the natural rate of unemployment is False When people underestimate inflation, the resulting unemployment rate is Correct expectations On the previous graph, place the black cross point to illustrate the situation when people overestimate inflation by 1%. (?) %. the natural rate. True or False: The modern view of the Phillips curve indicates that to keep the unemployment rate low, policymakers should follow policies consistent with low and steady inflation.
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