EBK ECONOMICS
13th Edition
ISBN: 8220106799642
Author: PARKIN
Publisher: PEARSON
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Chapter 29, Problem 8SPA
To determine
Identify the prediction of Federal open market committee (FOMC) participants.
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Inflation at lowest rate in 5 years
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In September, inflation in the United Kingdom fell to 1.1% a year, its lowest in 5
years. Analysts expected an inflation rate of 1.3% a year.
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Source: The New York Times, October 13, 2009
With the unemployment rate at 8 percent and the natural unemployment rate at 6
percent, sketch the short-run Phillips curve and mark on your graph the point which
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The unemployment rate is 8 percent and the natural unemployment rate is 6
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rate. Label it B.
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Draw the short-run Phillips curve that is consistent with these data. Label it.
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Inflation at lowest rate in 5 years
Inflation rate (percent per year)
In September, inflation in the United Kingdom fell to 1.1% a year, its
lowest in 5 years. Analysts expected an inflation rate of 1.3% a year.
1.7-
Source: The New York Times, October 13, 2009
With the unemployment rate at 8 percent and the natural unemployment
rate at 6 percent, sketch the short-run Phillips curve and mark on your
graph the point which shows the situation in September. Label the point
A.
1.5-
1.3-
The unemployment rate is 8 percent and the natural unemployment rate
is 6 percent.
1.1-
Draw a point that shows the unemployment rate and the inflation rate in
September. Label it A.
0.9+
4
8
10
12
Draw a point that shows the natural unemployment rate and the expected
Unemployment rate (percent of labor force)
inflation rate. Label it B.
>>> Draw only the objects specified in the question.
Draw the short-run Phillips curve that is consistent with these data. Label
it.
of
SUDmit test
The graph shows the short-run and long-run Phillips curves. The current inflation
rate is 5 percent a year.
Inflation rate (percent per year)
12.5-
LRPC
The Fed announces that it will increase the money growth rate so that the inflation
rate will rise to 6 percent a year.
10.0-
If no one believes the Fed and expected inflation remains at 5 percent a year,
explain the effect of the Fed's action on inflation and unemployment next year.
Choose the correct statement.
7.5-
5.0-
O A. The inflation rate rises and the unemployment rate will increase in a
movement up the long-run Phillips curve.
SRPC
O B. The unemployment rate will decrease but inflation will not change.
2.5-
OC. Nothing will happen. It takes more than a year for unemployment and
inflation to begin to respond to a speed up in money growth.
0.0-
O D. The inflation rate rises and the unemployment rate decreases in a
movement up the short-run Phillips curve.
10
Unemployment rate (percent of labor force)
empts
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Chapter 29 Solutions
EBK ECONOMICS
Ch. 29.1 - Prob. 1RQCh. 29.1 - Prob. 2RQCh. 29.1 - Prob. 3RQCh. 29.1 - Prob. 4RQCh. 29.1 - Prob. 5RQCh. 29.2 - Prob. 1RQCh. 29.2 - Prob. 2RQCh. 29.2 - Prob. 3RQCh. 29.2 - Prob. 4RQCh. 29.2 - Prob. 5RQ
Ch. 29.2 - Prob. 6RQCh. 29.2 - Prob. 7RQCh. 29.3 - Prob. 1RQCh. 29.3 - Prob. 2RQCh. 29.3 - Prob. 3RQCh. 29.3 - Prob. 4RQCh. 29.3 - Prob. 5RQCh. 29.3 - Prob. 6RQCh. 29.4 - Prob. 1RQCh. 29.4 - Prob. 2RQCh. 29.4 - Prob. 3RQCh. 29.4 - Prob. 4RQCh. 29 - Prob. 1SPACh. 29 - Prob. 2SPACh. 29 - Prob. 3SPACh. 29 - Prob. 4SPACh. 29 - Prob. 5SPACh. 29 - Prob. 6SPACh. 29 - Prob. 7SPACh. 29 - Prob. 8SPACh. 29 - Prob. 9APACh. 29 - Prob. 10APACh. 29 - Prob. 11APACh. 29 - Prob. 12APACh. 29 - Prob. 13APACh. 29 - Prob. 14APACh. 29 - Prob. 15APACh. 29 - Prob. 16APACh. 29 - Prob. 17APACh. 29 - Prob. 18APACh. 29 - Prob. 19APACh. 29 - Prob. 20APACh. 29 - Prob. 21APACh. 29 - Prob. 22APACh. 29 - Prob. 23APACh. 29 - Prob. 24APA
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