The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

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Answer 1

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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 31, Problem 7SPPA

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To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

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Students have asked these similar questions

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?

If the actual unemployment rate falls below the natural unemployment rate, how does the actual inflation rate change? The actual inflation rate ________. A. doesn't change, but the short-run Phillips curve shifts leftward B. rises up along the short-run Phillips curve C. doesn't change, but the expected inflation rate rises D. rises and the natural unemployment rate falls

The long-run Phillips curve will be vertical because: unemployment varies with inflation. unemployment is not affected by the inflation rate. the economy will eventually return to the natural rate of unemployment. people care more about the size of their wage, rather than what it can buy.

Answer 2

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 31, Problem 7SPPA

To determine

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

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 31, Problem 7SPPA

To determine

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Expert Solution & Answer

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Answer 4

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 31, Problem 7SPPA

To determine

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Expert Solution & Answer

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Answer 5

Chapter 31, Problem 7SPPA

To determine

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Answer 6

Chapter 31, Problem 7SPPA

To determine

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Answer 7

Chapter 31, Problem 7SPPA

To determine

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Answer 8

Expert Solution & Answer

Answer 9

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Answer 10

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Answer 11

Ch. 31 - Prob. 1SPPA Ch. 31 - Prob. 2SPPA Ch. 31 - Prob. 3SPPA Ch. 31 - Prob. 4SPPA Ch. 31 - Prob. 5SPPA Ch. 31 - Prob. 6SPPA Ch. 31 - Prob. 7SPPA Ch. 31 - Prob. 8SPPA Ch. 31 - Prob. 9SPPA Ch. 31 - Prob. 10SPPA

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Solution Summary: The author explains that the long-run Phillips curve represents the relationship between the inflation rate and the unemployment rate.

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

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Chapter 31 Solutions

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Solution Summary: The author explains that the long-run Phillips curve represents the relationship between the inflation rate and the unemployment rate.

To find: The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.

Want to see the full answer?

Chapter 31 Solutions

To find:

The direction in which the unemployment rate would change, and the way short run and long run Philips curve would shift.