Answered: The Phillips curve shows the…

The Phillips curve shows the relationship between inflation and what? A) Unemployment. B) The rate of price increases. C) The balance of trade. D) The rate of growth in an economy.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter17: The Philips Curve And Expetactions Theory

Section: Chapter Questions

Problem 1SQ

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Question

The Phillips curve shows the relationship between inflation and what?

A) Unemployment.

B) The rate of price increases.

C) The balance of trade.

D) The rate of growth in an economy.

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The Phillips curve is the relationship between (a) Change in GDP from potential and inflation. (b) GDP and unemployment. (c) The percent change in GDP and inflation. (d) The percent change in GDP and unemployment.
The Phillips Curve suggests that a government trying to reduce inflation must accept Select one: a. foreign aid. b. higher unemployment. c. stagflation. d. supply shocks. e. increased costs.
When you graph the Phillips curve, what goes on the y-axis? Change in inflation Rate of inflation Change in consumer price Change in short-run output
What is the Phillips Curve, and how does it relate to the trade-off between inflation and unemployment?
On a given short-run Phillips curve which of the following is held constant? a. the level of GDP b. employment c. the unemployment rate d. expected inflation
If workers accurately predict the rate of inflation, is there a short-run trade-off between inflation and unemployment, as predicted by the Phillips curve? Why or why not?
ASAPPP!!! Based on your understanding of the Phillips curve, is it possible for the unemployment rate to increase while inflation increases? Explain.
The inflation rate is 2 percent a year, and the quantity of money is growing at a pace that will maintain that inflation rate. The natural unemployment rate is 7 percent, and the current unemployment rate is 9 percent. In what direction will the unemployment rate change? How will the short-run Phillips curve and the long-run Phillips curve shift?
According to the Phillips curve, the inflation rate depends on all of these EXCEPT: a. previously expected inflation. b. an exogenous supply shock. c. the real interest rate. d. the deviation of output from its natural rate.
If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy: A) is producing at its potential GDP. B) is producing at a point where output is more than potential GDP. C) is producing at its equilibrium point. D) is producing at a point where output is less than potential GDP.
Consider the Phillips curves depicted in the graph above. The Fed announces its intention to decrease inflation from 10 percent to 5 percent per year, and it succeeds. If expectations of inflation are not altered by the Fed's announcement, the rate of unemployment will be ________ in the short run. a)less than 5.5 percent b)5.5 percent c)between 5.5 and 7.5 percent d)7.5 percent
What is true along the long-run Phillips curve? A. A labor shortage exists. B. A tradeoff exists between the inflation rate and the unemployment rate. C. The economy is at full employment. D. The inflation rate equals the expected inflation rate and any unemployment rate is possible.