Annual Percentage Change of Money (Nominal) Wage Rates (PCHWR) PCM PCMWR-2 PCMWR-1 Figure 1: The Phillips Curve b) Increase government purchases (G). c) All the above are true. d) None of the above is true. Long-Run Phillips Curve X U-2 Annual Unemployment Rate (U) Short Run Phillips Curve 2. (Referring to figure 1: The Phillips Curve) Which of the following could be a relevant fiscal policy to be used if the economy is at point Z? a) Open market sale.

Annual Percentage Change of Money (Nominal) Wage Rates (PCHWR) PCM PCMWR-2 PCMWR-1 Figure 1: The Phillips Curve b) Increase government purchases (G). c) All the above are true. d) None of the above is true. Long-Run Phillips Curve X U-2 Annual Unemployment Rate (U) Short Run Phillips Curve 2. (Referring to figure 1: The Phillips Curve) Which of the following could be a relevant fiscal policy to be used if the economy is at point Z? a) Open market sale.

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

Section17.3: Shifts In The Phillips Curve: The Role Of Supply Shocks

Problem 3QQ

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A. What assumptions did Thomas Sargent make when he claimed that inflation is always and everywhere a fiscal phenomenon?" B. Why is it appropriate in the book's short-term model for the author to use the Phillips Curve as an Aggregate Supply curve? Does it capture the working of the labor market as well as an AS curve based, say, on sticky wages? C. Provide an example of the book's short-run model being based on "microfoundations."
Given the Phillips Curve model below, suppose the economy is in an inflationary gap. and policy-makers (Fed or President & Congress) decide to intervene. If policy-makers decide to intervene, what type of “policy” will they advocate? With the use of policy, the economy will move from point _____ to point _____.
. Explain how the original Phillips curve was transformed into the expectations augmented Phillips curve. Using the latter, describe why any expansionary policy would not be effective in the long run and move the macro-economy back to the Natural Rate of Unemployment (NRU).
Consider a situation where the government implemented a successful program to train unemployed workers with new skills, find jobs suited to those new skills and help them relocate to the new jobs. a. What would be the impact of such a government expenditure (expansionary fiscal policy) on the short and long-run Phillips curve? b. Could an expansionary monetary policy achieve the same result?
The Phillips curve is given by I-T =0.1-2u The inflation is a year becomes the expected inflation in the next year. The unemployment rate is kept by the fed at 4%. If the inflation in the last year was 0, then the inflation in the next year will be: A. 1% B. 2% C. 3% D. 4% Answer 04:29 PM 19-10-2021
What kind of changesin the economy might infuence the slope of the Phillips curve?
) a. Draw a short run Phillips curve and show the slope of the curve and then explain what it implies for the policy makers?
What is the effect of an increase in aggregate demand on the short-run Phillips curve? When aggregate demand increases, _______. A. the short-run Phillips curve shifts upward B. the short-run Phillips curve shifts downward C. a movement occurs upward along the short-run Phillips curve D. a movement occurs downward along the short-run Phillips curve
Starting from any point in tne Pnillips curve shown in Figure 12.5, an unexpected decrease in oil prices will move the economy from point A c to point b. c to point a. C a to point b. D b to point c. Not enough information is given. Figure 12.5: Phillips Curve
1. An economy has the following equation for the Phillips Curve: π = Eπ − 0.5(u − 6)People form expectations of inflation by taking a weighted average of the previous two years of inflation: Okun’s law for this economy is: Eπ = 0.7π−1 + 0.3π−2 (Y −Y−1)/(Y-1)=3.0−2.0(u−u−1) Th economy begins at its natural rate of unemployment with a stable inflation rate of 5 percent. Graph the short-run tradeoff between inflation and unemployment that this economy faces. Label the point where the economy begins as A. (Be sure to give numerical values for point A.) A fall in aggregate demand leads to a recession, causing the unemployment rate to rise 4 percentage points above its natural rate. On your graph in part (b), label the point the economy experiences that year as point B.(Be sure to give numerical values.) Unemployment remains at this high level for two years (the initial year described in part (c) and one more), after which it returns to its natural rate. Create a table showing…
a) Are the effects of an increase in aggregate demand in the AD-AS model consistent with the Phillips curve? Explain. b. Discuss the factors determining the slope of the short-run Phillips curve. Is the linear shape appropriate? Why or why not?
er In 2017, nearly 3.5% of Vietnamese imports constituted of refined oil. If the price of oil rises significantly, what effect would this have on the Phillips curve in Vietnam? Real interest rate Unexpected inflation Decreased Interra Output gep cand Output gap Output gep Unexpected inflation ang costs Output gap