What does the Phillips Curve illustrate? A. The relationship between inflation and unemployment B. The relationship between interest rates and investment C. The relationship between government spending and economic growth D. The relationship between savings and consumption
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A. The relationship between inflation and unemployment
B. The relationship between interest rates and investment
C. The relationship between government spending and economic growth
D. The relationship between savings and consumption
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- What tradeoff does a Phillips curve show?Describe the Phillips curve (O.G., not modified/expectations) and drawa graph of the relationship. How good was this model with 1960’s data vswith data from 1970-2000’s? Explain.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.
- Julia is a macroeconomist who works as a policy maker for a European government. She believes that policy makers can choose from a menu of inflation and unemployment combinations and that the non-accelerating inflation rate of unemployment (NAIRU) does not exist. What school of thought best matches Julia's viewpoint? 1)Hysteresis Keynesian 2)Earlier monetarist 3)Persistence Keynesian 4)Old Keynesian 5)New classical and OECD economistDo you observe a Phillips curve, a reverse Phillips curve, or no relationship in the long-run?Explain your answer! What does this imply about the stability of the short-run Phillips curveover time? I attach a picture. Just answer if there is a Phillips curve, a reverse Phillips Curve or no relationship and why you think so. Thank you.ANS ONLY 2 PLEASE THANKS Suppose you live in a community of 5,000 people where everyone wants to work and seeks employment. If 4,000 people are over 16 years old and 3,000 of them are employed, what is the unemployment rate in this community? What are the three major types of unemployment? What are their causes? Discuss the costs associated with high inflation. Describe the four phases of the classical business cycle explaining how employment is typically affected during each phase?
- a) Explain the concept of the natural rate of unemployment using the expectations-augmented (modified or modern) Phillips curve model. b) Why is this model useful for policy-makers?Why is the axiom of economics state that 2-3% of inflation is a good thing for the economy. Why would it matter since, real gdp isn't growingA.) Okun's law is stated as... Change in the Unemployment Rate = -0.2*(Percent Change in Real GDP - 2.5) ... Then what is the expected annual growth rate of GDP? B.)Change in the Unemployment Rate = -0.2*(Percent Change in Real GDP - 2.5) ... If the percent change in GDP is 3%, and the unemployment rate starts at 5%, what is the change in the unemployment rate?
- (a) What events of the 1970s and 1980s made economists believe that the shortrun relationship between inflation and unemployment was unstable (not fixed and permanent)? (b) Explain, using a diagram(s) and the concept of stagflation, the relationship between shifts in the SRAS curve and the position of the short-run Phillips curve.“The more people at work, the higher their bills” The Phillips Curve shows the correlation between unemployment and inflation.” In the light of this statement,(a) Draw the short-run trade-off between inflation and unemployment. How might the Central Bank move the economy from one point on this curve to another? (b) Draw the long-run trade-off between inflation and unemployment. Explain how the short-run and long-run trade-offs are related. (c) Illustrate the effects of the following developments on both the short-run and long-run Phillips curves. Give the economic reasoning underlying your answers.1. A rise in the natural rate of unemployment.2. A decline in the price of imported oil.Explain different approaches – Neo Keynesian, Friedman, and Lucas – of Philips curve in the short – run and Phillips curve in the long – run