Sample questions for Test 1
... C) unemployed workers are not organized enough to influence wage negotiations D) firms are unsure about their competitors' behavior and are therefore reluctant to change wages and prices following a change in aggregate demand 15. The inflation-expectations-augmented Phillips curve implies that A) un ...
... C) unemployed workers are not organized enough to influence wage negotiations D) firms are unsure about their competitors' behavior and are therefore reluctant to change wages and prices following a change in aggregate demand 15. The inflation-expectations-augmented Phillips curve implies that A) un ...
Chapter 5: Worksheet mark scheme (25 marks)
... Give examples of four recent social and cultural changes in society. ...
... Give examples of four recent social and cultural changes in society. ...
Chapter 5: Worksheet mark scheme (25 marks)
... Give examples of four recent social and cultural changes in society. ...
... Give examples of four recent social and cultural changes in society. ...
The importance of inflation expectations
... Inflation expectations are one of the most important channels whereby monetary policy influences the economic activity. They play a salient role in the process of consumer goods price formation at both producer and retailer level. Economic agents find it relatively costly to adjust prices very often ...
... Inflation expectations are one of the most important channels whereby monetary policy influences the economic activity. They play a salient role in the process of consumer goods price formation at both producer and retailer level. Economic agents find it relatively costly to adjust prices very often ...
Demand Pull Inflation
... Demand Pull Inflation As aggregate demand Increases then the general price level rises When total demand exceeds total supply demand pull inflation occurs If the economy is close to full capacity the effects of demand pull inflation will be greater ...
... Demand Pull Inflation As aggregate demand Increases then the general price level rises When total demand exceeds total supply demand pull inflation occurs If the economy is close to full capacity the effects of demand pull inflation will be greater ...
35 - Cengage Learning
... Unemployment 2. . . . but in the long run, expected rate inflation falls, and the short-run Phillips curve shifts to the left. Copyright © 2011 Cengage Learning ...
... Unemployment 2. . . . but in the long run, expected rate inflation falls, and the short-run Phillips curve shifts to the left. Copyright © 2011 Cengage Learning ...
lesson 3
... ment, holding the expected inflation rate and the natural rate of unemployment constant. Remember that the natural rate of unemployment is the rate of unemployment at fullemployment output. Point A on the Phillips curve is the expected inflation rate-natural unemployment rate point. If there is an u ...
... ment, holding the expected inflation rate and the natural rate of unemployment constant. Remember that the natural rate of unemployment is the rate of unemployment at fullemployment output. Point A on the Phillips curve is the expected inflation rate-natural unemployment rate point. If there is an u ...
Economics “Ask the Instructor” Clip 59 Transcript
... In the case of demand-pull inflation, the aggregate demand curve shifts to the right. This could be triggered by a number of events, including a drop in the international value of the dollar, an increase in government spending, a tax cut, or an increase in consumer or business optimism that leads to ...
... In the case of demand-pull inflation, the aggregate demand curve shifts to the right. This could be triggered by a number of events, including a drop in the international value of the dollar, an increase in government spending, a tax cut, or an increase in consumer or business optimism that leads to ...
Unemployment and Inflation
... Food and energy prices are volatile … can and do spike up sharply now and again. To accurately study long-term trends in the inflation rate, economists exclude food and energy from the ...
... Food and energy prices are volatile … can and do spike up sharply now and again. To accurately study long-term trends in the inflation rate, economists exclude food and energy from the ...
Chapter 13
... 1923-24: A German woman feeding a stove with currency notes, which burn longer than the amount of firewood they can buy ...
... 1923-24: A German woman feeding a stove with currency notes, which burn longer than the amount of firewood they can buy ...
Institute of Business Management Semester: Spring Course
... a) What determines the position of the FE line? Give two examples of changes in the economy that would shift the FE line to the right. b). What relationship does the IS curve capture? Derive the IS curve graphically and show why it slopes as it does. Give two examples of changes in the economy that ...
... a) What determines the position of the FE line? Give two examples of changes in the economy that would shift the FE line to the right. b). What relationship does the IS curve capture? Derive the IS curve graphically and show why it slopes as it does. Give two examples of changes in the economy that ...
Nominal and Real Interest Rates
... The real interest rate expresses the cost of borrowed funds after the expected erosion of the value of those funds due to the rise in the general price level ...
... The real interest rate expresses the cost of borrowed funds after the expected erosion of the value of those funds due to the rise in the general price level ...
1. Crash Course Macro 5 video student fill in
... c. There will always be SOME unemployment – the goal is NOT ….. d. There will always be “frictional” and “structural” unemployment e. Goal is to have NO …. f. ...
... c. There will always be SOME unemployment – the goal is NOT ….. d. There will always be “frictional” and “structural” unemployment e. Goal is to have NO …. f. ...
Prezentace aplikace PowerPoint
... – transformation recession in other countries • + lack after western production ...
... – transformation recession in other countries • + lack after western production ...
exercises for q2
... c) input prices are completely rigid as output prices rise; d) input prices adjust more than proportionally to changes in the price level. 6. The AD-AS model suggests that IN THE LONG RUN: a) unemployment can be reduced by increasing AD; b) increases in AD will cause unemployment to rise above its n ...
... c) input prices are completely rigid as output prices rise; d) input prices adjust more than proportionally to changes in the price level. 6. The AD-AS model suggests that IN THE LONG RUN: a) unemployment can be reduced by increasing AD; b) increases in AD will cause unemployment to rise above its n ...
Matching History and Theory
... policy shifts the AD curve to the right from AD1 to AD2, the equilibrium moves from point A to point B. The price level rises from P1 to P2, while output remains the same. Panel (b) shows the long-run Phillips curve, which is vertical at the natural rate of unemployment. In the long run, expansionar ...
... policy shifts the AD curve to the right from AD1 to AD2, the equilibrium moves from point A to point B. The price level rises from P1 to P2, while output remains the same. Panel (b) shows the long-run Phillips curve, which is vertical at the natural rate of unemployment. In the long run, expansionar ...
Macro Spectrum
... would enable them to compute perfectly the relative prices they care about, agents make errors…[A]gents temporarily mistake a general increase in all absolute prices as an increase in the relative price of the good they are selling, leading them to increase their supply of that good…Since everyone i ...
... would enable them to compute perfectly the relative prices they care about, agents make errors…[A]gents temporarily mistake a general increase in all absolute prices as an increase in the relative price of the good they are selling, leading them to increase their supply of that good…Since everyone i ...
Chapter19 - Web.UVic.ca
... b) Potential GDP is the level of output produced when all factors of production are being used at their normal rates. Output can exceed potential when labour works overtime or when capital and land are used more intensively than normal. c) A recessionary output gap only requires Y to be below Y*. It ...
... b) Potential GDP is the level of output produced when all factors of production are being used at their normal rates. Output can exceed potential when labour works overtime or when capital and land are used more intensively than normal. c) A recessionary output gap only requires Y to be below Y*. It ...
economic growth and instability agree disagree
... actual real GDP that exceeds its potential real GDP. ...
... actual real GDP that exceeds its potential real GDP. ...
Phillips curve
In economics, the Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result in an economy. Stated simply, decreased unemployment, (i.e., increased levels of employment) in an economy will correlate with higher rates of inflation.While there is a short run tradeoff between unemployment and inflation, it has not been observed in the long run. In 1968, Milton Friedman asserted that the Phillips Curve was only applicable in the short-run and that in the long-run, inflationary policies will not decrease unemployment. Friedman then correctly predicted that, in the upcoming years after 1968, both inflation and unemployment would increase. The long-run Phillips Curve is now seen as a vertical line at the natural rate of unemployment, where the rate of inflation has no effect on unemployment. Accordingly, the Phillips curve is now seen as too simplistic, with the unemployment rate supplanted by more accurate predictors of inflation based on velocity of money supply measures such as the MZM (""money zero maturity"") velocity, which is affected by unemployment in the short but not the long term.