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Instructions The Mystery of Low Unemployment and Low Inflation: Background Information: The actual unemployment rate is lower than the estimated natural rate of ur happens we are in an "inflationary gap" and that wages and prices should rise. Natural Rate of Unemployment (Long-Term) Civilian Unemployment Rate 10 9 Inflationary Gap: The actual unemployment rate natural rate 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Even though the unemployment rate has fallen to lowest levels in 20 years the inflation rate has remaine Federal Reserve. Economists are searching for explanations. 1. What is surprising about today's low rate of inflation. 2. Why is the Fed concerned about such a low inflation rate? 3. How could technological progress lead to low inflation? 4. How could an aging population lead to low inflation? 5. How could globalization lead to low inflation? Percent 8

Instructions The Mystery of Low Unemployment and Low Inflation: Background Information: The actual unemployment rate is lower than the estimated natural rate of ur happens we are in an "inflationary gap" and that wages and prices should rise. Natural Rate of Unemployment (Long-Term) Civilian Unemployment Rate 10 9 Inflationary Gap: The actual unemployment rate natural rate 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Even though the unemployment rate has fallen to lowest levels in 20 years the inflation rate has remaine Federal Reserve. Economists are searching for explanations. 1. What is surprising about today's low rate of inflation. 2. Why is the Fed concerned about such a low inflation rate? 3. How could technological progress lead to low inflation? 4. How could an aging population lead to low inflation? 5. How could globalization lead to low inflation? Percent 8

ECON MACRO
ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter10: Aggregate Supply
Section: Chapter Questions
Problem 1.1P
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Instructions The Mystery of Low Unemployment and Low Inflation: Background Information: The actual unemployment rate is lower than the estimated natural rate of unemp happens we are in an "inflationary gap" and that wages and prices should rise. - Natural Rate of Unemployment (Long-Term) - Civilian Unemployment Rate 10 Inflationary Gap: The actual unemployment rate < natural rate 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Even though the unemployment rate has fallen to lowest levels in 20 years the inflation rate has remained lo Federal Reserve. Economists are searching for explanations. 1. What is surprising about today's low rate of inflation. 2. Why is the Fed concerned about such a low inflation rate? 3. How could technological progress lead to low inflation? 4. How could an aging population lead to low inflation? 5. How could globalization lead to low inflation? Percent 9 8
Transcribed Image Text:Instructions The Mystery of Low Unemployment and Low Inflation: Background Information: The actual unemployment rate is lower than the estimated natural rate of unemp happens we are in an "inflationary gap" and that wages and prices should rise. - Natural Rate of Unemployment (Long-Term) - Civilian Unemployment Rate 10 Inflationary Gap: The actual unemployment rate < natural rate 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Even though the unemployment rate has fallen to lowest levels in 20 years the inflation rate has remained lo Federal Reserve. Economists are searching for explanations. 1. What is surprising about today's low rate of inflation. 2. Why is the Fed concerned about such a low inflation rate? 3. How could technological progress lead to low inflation? 4. How could an aging population lead to low inflation? 5. How could globalization lead to low inflation? Percent 9 8
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