If the public adopts rational expectations O The Phillips curve is vertical at the current rate of unemployment O The Phillips curves moves according to expectations about inflation The Phillips curve is horizontal at the target inflation rate The Phillips curve is vertical at the natural rate of unemployment

If the public adopts rational expectations O The Phillips curve is vertical at the current rate of unemployment O The Phillips curves moves according to expectations about inflation The Phillips curve is horizontal at the target inflation rate The Phillips curve is vertical at the natural rate of unemployment

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: The Short-run Trade-off Between Inflation And Unemployment

Section: Chapter Questions

Problem 1PA

See similar textbooks

Similar questions

Consider the Friedman-Phelps model of the Phillips Curve as discussed in lecture. Assume the economy is currently at Y-full employment. When the Fed sells government securities to the public, and there are no other exogenous shocks to the economy, which one of the following is predicted to happen? The actual inflation rate increases, and the unemployment rate increases permanently. O The actual inflation rate increases, and the unemployment rate increases first and then gradually goes back to the natural rate of unemployment. O The actual inflation rate decreases, and the unemployment rate increases first and then gradually goes back to the natural rate of unemployment. The actual inflation rate decreases, and the unemployment rate increases permanently. The actual inflation rate decreases, and the unemployment rate decreases first and then gradually goes back to the natural rate of unemployment.
Do the expected inflation rate and natural unemployment rate remain constant along the short-run Phillips curve? Along the short-run Phillips curve, _______. A. the expected inflation rate rises as the natural unemployment rate rises B. the expected inflation rate is constant and the natural unemployment rate varies C. the expected inflation rate and the natural unemployment rate are constant D. the expected inflation rate rises as the natural unemployment rate falls thank ss
There are economists talking about the Phillips curve is a failure to predict the economy during the current pandemic . Which of the following statement about the Phillips curve is correct. O Phillips curve simply outlines the observation of a negative relationship between inflation and unemployment in data. The central banks should always design their policies according to the Phillips curve. Phillips curve predicts that high inflation leads to low unemployment rate. Phillips curve predicts that high unemployment rate cause low inflation.
The long-run Phillips Curve describes: The relationship between unemployment and inflation after expectations of inflation have had time to adjust to experience. O An increase in expected inflation will cause nominal wages to rise, shifting both SRAS and the Phillips Curve up. That there is a predictable negative relationship between the output gap and the unemployment rate but it is not one to one. The negative short-run relationship between the unemployment rate and the inflation rate.
Question 30 If the economy overheats with the unemployment rate below the NAIRU and inflationary expectations are not anchored, then what will be the effect on the Modern Phillips Curve? O The Phillips Curve stays stable, and the economy moved down and to the right along the Phillips Curve. O The Phillips Curve shifts up. The Phillips Curve stays stable, and the economy moves up the stable Phillips curve. O The Phillips Curve shifts down.
Question 3 If the public adopts rational expectations O The Phillips curve's movements can be correctly predicted by the policy makers O The Phillips curve is vertical at the natural rate of unemployment O The Phillips curve is vertical at the current rate of unemployment O The Phillips curve is horizontal at the target inflation rate
5. The Phillips curve in the late 20th century The following table shows selected data on unemployment and inflation in the United States between 1964 and 1968. Unemployment Rate Inflation Rate Year (Percent) (Percent) 1964 5.2 1.3 1965 4.5 1.6 1966 3.8 2.9 1967 3.8 3.1 1968 3.6 4.2 Plot the data for these five years on the following graph. Note: Vou will not be graded on how you plot the points, but plotting the points accurately on the graph will help you examine the relationship between unemployment and inflation during this period and solve the problems that follow. Data Points 2 4 UNEMPLOYMENT RATE (Percent) INFLATION RATE(Percent)
5. Expectations and the modern view of the Phillips curve The following graph shows the short-run Phillips curve within the expectations framework. On the graph, place the grey star point to illustrate the situation when people accurately anticipate the inflation rate. ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) 32 19 O -2 0 1 2 4 UNEMPLOYMENT RATE (Percent) 3 5 6 Correct expectations + When people accurately anticipate the inflation rate, the natural rate of unemployment is ? % On the previous graph, place the black cross point to illustrate the situation when people overestimate inflation by 1%.
6. Expectations and the modern view of the Phillips curve The following graph shows the short-run Phillips curve within the expectations framework. On the graph, place the grey star point to illustrate the situation when people accurately anticipate the inflation rate. ACTUAL MINUS EXPECTED RATE OF INFLATION (Percent) w 1 4 UNEMPLOYMENT RATE (Percent) 3 O True 5 When people accurately anticipate the inflation rate, the natural rate of unemployment is False When people underestimate inflation, the resulting unemployment rate is Correct expectations On the previous graph, place the black cross point to illustrate the situation when people overestimate inflation by 1%. (?) %. the natural rate. True or False: The modern view of the Phillips curve indicates that to keep the unemployment rate low, policymakers should follow policies consistent with low and steady inflation.
1. Assume that in an economy the phillips curve is: At = -0,8 (U-Un) + p Last year's inflation was 0,08, current inflation is 0,08, unemployment rate is 0,04 and the price shock is 0,01. What is the natural rate of unemployment? 2. The price level is 143, the inflation rate is 0,08, the nominal money supply is 12785, the nominal interest rate is 0,13 percent. Calculate the seignorage.
How does the modern view of the Phillips curve differ from the earlier view? ___The early view of the Phillips curve suggested that the Phillips curve shifts with changes in inflation expectations. Such a view failed to recognize that the Phillips curve is a fixed inverse relationship between inflation and unemployment. ___The early view of the Phillips curve suggested that the Phillips curve is fixed, with higher rates of inflation associated with lower rates of unemployment, and vice versa. Such a view failed to recognize the importance of inflation expectations in determining the position of the short-run Phillips curve. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Which of the following is downward-sloping? a. both the long-run Phillips curve and the long-run aggregate-supply curve b. neither the long-run Phillips curve nor the long-run aggregate-supply curve c. the short-run Phillips curve, but not the long-run aggregate-supply curve d. the long-run Phillips curve, but not the long-run aggregate-supply curve