) In the 1970's, the United States had slow growth and high inflation. Which kind of shock best fits these facts? - Negative real shock - Positive real shock - Negative aggregate demand shock - Positive aggregate demand shock

) In the 1970's, the United States had slow growth and high inflation. Which kind of shock best fits these facts? - Negative real shock - Positive real shock - Negative aggregate demand shock - Positive aggregate demand shock

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

Section17.3: Shifts In The Phillips Curve: The Role Of Supply Shocks

Problem 3QQ

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Concept explainers

Unemployment and Cost of Unemployment

Unemployment is the state of being unemployed, even when an individual is actively seeking work opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed.

Question

A) In the 1970's, the United States had slow growth and high inflation. Which kind of shock best fits these facts?

- Negative real shock

- Positive real shock

- Negative aggregate demand shock

- Positive aggregate demand shock

B) Using the same categories, explain the late 1990's, when the U.S. experienced fast growth and falling inflation.

C) Again using the same four categories, explain the early 2000s, when the U.S. experienced slow growth and falling inflation.

D) Which shock best explains the 1981-1982 recession, when inflation fell quickly and unemployment rose quickly?

E) Which shock(s) best explains the Great Recession of 2007-2008?

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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