Consider a typical downward sloping short run Phillips curve. Which combination of events could cause 1) a movement along the particular short run Phillips curve (SRPC) to the "south-east" and then followed by 2) a leftward shift of the entire SRPC? Group of answer choices a)Decrease in government spending followed by a rightward shift in the short-run aggregate supply curve. b) Increase in money supply followed by a rightward shift in the short-run aggregate supply curve. c)Decrease in government spending followed by a leftward shift in the short-run aggregate supply curve. d)Increase in government spending followed by a rightward shift in the short-run aggregate supply curve.

Consider a typical downward sloping short run Phillips curve. Which combination of events could cause 1) a movement along the particular short run Phillips curve (SRPC) to the "south-east" and then followed by 2) a leftward shift of the entire SRPC? Group of answer choices a)Decrease in government spending followed by a rightward shift in the short-run aggregate supply curve. b) Increase in money supply followed by a rightward shift in the short-run aggregate supply curve. c)Decrease in government spending followed by a leftward shift in the short-run aggregate supply curve. d)Increase in government spending followed by a rightward shift in the short-run aggregate supply curve.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter27: Issues In Macroeconomic Theory And Policy

Section: Chapter Questions

Problem 8P

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Assume that the economy of Country X has an actual unemployment rate of 7%, a natural rate of unemployment of 5%, and an inflation rate of 3%. a. Using the numerical values given above, draw a correctly labeled graph of the short-run and long-run Phillips curves. Label the current short-run equilibrium as point B. Plot the numerical values above on the graph. b. Assume that the government of Country X takes no policy action to reduce unemployment. In the long run, will each of the following shift to the right, shift to the left, or remain the same? i. Short-run aggregate supply curve. Explain. ii. Long-run Phillips curve c. Identify a fiscal policy action that could be used to reduce the unemployment rate in the short run. d. Draw a correctly labeled graph of aggregate demand and short-run aggregate supply, and show the impact on the equilibrium price level and real gross domestic product (GDP) of the fiscal policy action identified in part (c). e. Based on the change in real GDP…
As with demand and supply analysis, changes in the economy can cause both shifts of and movements along the short-run Phillips curve. Which of the following would cause a shift of the short-run Phillips curve? Check all that apply. An increase in government spending A decrease in short-run aggregate supply An increase in the expected inflation rate
How does the short-run Phillips curve reflect an increase in the price of oil such as occurred in the early 1970s? as a leftward shift in the short-run Phillips curve as a rightward shift in the short-run Phillips curve as a downward movement along the short-run Phillips curve as an upward movement along the short-run Phillips curve
For each of the following scenarios, illustrate the effects of the development on both the short-run and long-run Phillips curves (SRPC and LRPC, respectively). 1. There is a rise in the price of imported oil. 2. There is a fall in government spending.
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.
a) What is Phillips curve? Draw the short-run Phillips curve and the long-run Phillips curve. Explain why they are different. b) Suppose the economy is in a long-run equilibrium. Suppose a wave of business pessimism reduces aggregate demand. Show the effect of this shock on your diagram from part (a). If the RBI undertakes expansionary/contractionary monetary policy, can it return the economy to its original inflation rate and original unemployment rate? (b) What is sacrifice ratio?
Show the effect of an increase in the natural rate of unemployment on both the long-run and short-run Phillips curves. Assume the graph represents the short-run and long-run Phillips curves before the increase in the natural rate of unemployment. 1.) Using the line drawing tool, show the effect of a higher natural rate of unemployment by drawing either a new short-run Phillips curve, a new long-run Phillips curve, or both. Label your curve(s) either 'SRPC₂' or 'LRPC2.' 2.) Using the point drawing tool, indicate the new long-run equilibrium. Label your point 'e Carefully follow the instructions above and only draw the required objects. Use your graph to explain how the increase in the natural rate of unemployment lessens the effect of high unemployment on the inflation rate. With the higher natural rate of unemployment, the inflation rate is at the long-run equilibrium. Did the high unemployment rates during and immediately after the recession of 2007-2009 turn out to be permanent?…
For each of the following scenarios, illustrate the effects of the development on both the short-run and long-run Phillips curves (SRPC and LRPC, respectively). 1. There is a fall in the natural rate of unemployment. 2. There is a decline in expected inflation. 3. There is a fall in government spending. 4. There is a rise in the price of imported oil.
Does the Phillips curve have a positive or negative slope? Explain how this slope is derived. When will an increase in aggregate demand not result in lower unemployment rates in the short run?
A rightward shift of the short-run AS curve will - shift the short-run Phillips Curve to the right. - shift the short-run Phillips Curve to the left. - cause a movement up along the existing short-run Phillips Curve - cause a movement down along the existing short-run Phillips Curve
If expected inflation decreases, does the short-run Phillips curve shift? If so, what direction does it shift? Does the long-run Phillips curve shift? If so, what direction does it shift?
Which of the following points are on the short-run Phillips curve and the aggregate supply curve in 2021? A. Point B is at (6, 4) on the SRPC and at (10.1, 104) on the AS curve. B. Point C is at (6, 4) on the SRPC and at (106, 10.2) on the AS curve. C. Point D is at (2, 110) on the SRPC and at (10.4, 110) on the AS curve. D. Point A is at (8, 102) on the SRPC and at (10.0, 4) on the AS curve. Screenshot attached thanks