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Business Economics Principles of Macroeconomics (MindTap Course List)

Long-run Phillips curve .

Long-run Phillips curve .

Solution Summary: The author explains that the long-run Phillips curve is a vertical curve that shows the inverse relationship between inflation and unemployment.

Principles of Macroeconomics (MindTap Course List)

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN: 9781285165912

Author: N. Gregory Mankiw

Publisher: Cengage Learning

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Question

Definition Definition Relationship between the rate of unemployment and the rate of inflation that shows that the lower the initial rate of unemployment, the greater the rise in wage rate corresponding to a given rise in the rate of unemployment. The Phillips curve assumes that the ratio between prices and nominal wage rates is constant in the short run. Presented graphically, the Phillips curve shows an inverse relationship between the rate of unemployment and the rate of inflation.

Chapter 22, Problem 2QR

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Long-run Phillips curve.

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Chapter 22, Problem 1QR

Chapter 22, Problem 3QR

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