Suppose the economy is currently producing at potential and the actual output is $9.5 billion. The inflation rate is 3%. The slope of the Phillips curve is 1212. In response to a macroeconomic shock that does not affect actual output but raises potential output from $9.5 billion to $10 billion, you know that based on the Phillips Curve the inflation rate in the economy will change to percent.

Suppose the economy is currently producing at potential and the actual output is $9.5 billion. The inflation rate is 3%. The slope of the Phillips curve is 1212. In response to a macroeconomic shock that does not affect actual output but raises potential output from $9.5 billion to $10 billion, you know that based on the Phillips Curve the inflation rate in the economy will change to percent.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter35: The Short-Run Trade-off Between Inflation And Unemployment

Section: Chapter Questions

Problem 3QCMC

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