CHAPTER 8
... 21. Explain the difference between real and nominal income. How can you get an approximation of the percentage change in real income from one time period to another? ...
... 21. Explain the difference between real and nominal income. How can you get an approximation of the percentage change in real income from one time period to another? ...
Slide 1
... -LEFTWARD SHIFTS OF THE SHORT RUN AGGREGATE SUPPLY CURVE MAKE A DIFFERENCE. THE PHILLIPS CURVE TRADEOFF IS DERIVED FROM SHIFTING THE AGGREGATE DEMAND CURVE ALONG A STABLE SHORT RUN AGGREGATE SUPPLY CURVE -THE “GREAT STAGFLATION” OF THE 1970s MADE IT CLEAR THAT THE PHILLIPS CURVE DID NOT REPRESENT A ...
... -LEFTWARD SHIFTS OF THE SHORT RUN AGGREGATE SUPPLY CURVE MAKE A DIFFERENCE. THE PHILLIPS CURVE TRADEOFF IS DERIVED FROM SHIFTING THE AGGREGATE DEMAND CURVE ALONG A STABLE SHORT RUN AGGREGATE SUPPLY CURVE -THE “GREAT STAGFLATION” OF THE 1970s MADE IT CLEAR THAT THE PHILLIPS CURVE DID NOT REPRESENT A ...
Chapter 28 - Weber State University
... e. all of the above. 13. Fiscal and monetary policies adopted by the Carter administration in the first half of his term resulted in a. stable prices and low unemployment. b. deflation. c. a rapid rise in the inflation rate. d. a balanced federal budget. 14. In the early 1980s, many people found the ...
... e. all of the above. 13. Fiscal and monetary policies adopted by the Carter administration in the first half of his term resulted in a. stable prices and low unemployment. b. deflation. c. a rapid rise in the inflation rate. d. a balanced federal budget. 14. In the early 1980s, many people found the ...
HW4 - IS MU
... b) Now suppose economists allow for crowding out. Would their new estimate of the MPC be larger or smaller? 3. Suppose the economy is in a long-run equilibrium. a) Draw both an aggregate-supply/aggregate-demand diagram and a Phillips-curve diagram with the economy’s short-run and long-run Phillips c ...
... b) Now suppose economists allow for crowding out. Would their new estimate of the MPC be larger or smaller? 3. Suppose the economy is in a long-run equilibrium. a) Draw both an aggregate-supply/aggregate-demand diagram and a Phillips-curve diagram with the economy’s short-run and long-run Phillips c ...
UE and Inflation Outline
... ii. Individuals with COLAs ii. Debtors c. Anticipating Inflation in Rates 1. Nominal Interest Rate i. NIR = real interest rate + inflation premium (expected rate of inflation ii. Illustration: 3. Hyperinflation a. Speculative measure are taken to counter inflation that leas to further inflation 1. I ...
... ii. Individuals with COLAs ii. Debtors c. Anticipating Inflation in Rates 1. Nominal Interest Rate i. NIR = real interest rate + inflation premium (expected rate of inflation ii. Illustration: 3. Hyperinflation a. Speculative measure are taken to counter inflation that leas to further inflation 1. I ...
View/Open
... adopted to reduce cost-push inflation, and expenditures on manpower programs have risen from $2.3 billion in fiscal 1969 to over $5 billion this year. These were attempts to get back toward more acceptable levels of inflation and unemployment. But several questions still remain. Is there any such th ...
... adopted to reduce cost-push inflation, and expenditures on manpower programs have risen from $2.3 billion in fiscal 1969 to over $5 billion this year. These were attempts to get back toward more acceptable levels of inflation and unemployment. But several questions still remain. Is there any such th ...
Chapter 13 - University of Alberta
... • The overall unemployment rate may have risen due to: – changes in the composition of the labour force by age and sex; – structural changes in the economy; – changes in employment insurance. ...
... • The overall unemployment rate may have risen due to: – changes in the composition of the labour force by age and sex; – structural changes in the economy; – changes in employment insurance. ...
Econ 375 Sample Exam 3 Questions 1. Some firms do not instantly
... C) fluctuations in real GDP have been less severe following World War II than prior to World War I. D) failure of policymakers to respond to large contractionary shocks to private spending caused the Great Depression. 15. The outside lag is the time: A) before automatic stabilizers respond to econom ...
... C) fluctuations in real GDP have been less severe following World War II than prior to World War I. D) failure of policymakers to respond to large contractionary shocks to private spending caused the Great Depression. 15. The outside lag is the time: A) before automatic stabilizers respond to econom ...
Final Exam - Whitman People
... (c) (10pts) What exactly did the Federal Reserve do under Volcker, why did they do it, and what were the results? Explain, with reference to another Keynesian sticky-wage AD-AS graph. ...
... (c) (10pts) What exactly did the Federal Reserve do under Volcker, why did they do it, and what were the results? Explain, with reference to another Keynesian sticky-wage AD-AS graph. ...
1 The original Phillips curve and its Policy Implications Phillips
... comes down and if initially people do not revise their expected inflation in line with the actual rate of inflation, the economy should first experience a recession. And then, eventually in the long-run as people revise their expectations, the economy should go back to the full employment level of n ...
... comes down and if initially people do not revise their expected inflation in line with the actual rate of inflation, the economy should first experience a recession. And then, eventually in the long-run as people revise their expectations, the economy should go back to the full employment level of n ...
Macroeconomics Quiz 4 Topics
... variables like real GDP or unemployment 3. What is the historical (data) evidence for: a. An upward sloping (or flat) aggregate supply curve? b. For a vertical aggregate supply curve? c. For a vertical Phillip’s curve? d. For the Quantity Theory of Money equation? 4. How does the AD/AS model explain ...
... variables like real GDP or unemployment 3. What is the historical (data) evidence for: a. An upward sloping (or flat) aggregate supply curve? b. For a vertical aggregate supply curve? c. For a vertical Phillip’s curve? d. For the Quantity Theory of Money equation? 4. How does the AD/AS model explain ...
Chapter 35 - Cengage Learning
... inflation rises, and the short-run Phillips curve shifts to the right. Long-run Phillips curve ...
... inflation rises, and the short-run Phillips curve shifts to the right. Long-run Phillips curve ...
MACRO 1-page graph summary 2011
... Demand = Investment Demand (business who borrow $) Use Real Interest Rate on this graph! Crowding Out: Supply shifts left as Gov’t savings falls (less national savings) Private investor are “crowded out” by ↑ real interest rates. (less (I) capital investment!) Real world example: Spain, Greece, Port ...
... Demand = Investment Demand (business who borrow $) Use Real Interest Rate on this graph! Crowding Out: Supply shifts left as Gov’t savings falls (less national savings) Private investor are “crowded out” by ↑ real interest rates. (less (I) capital investment!) Real world example: Spain, Greece, Port ...
14.02 Principles of Macroeconomics Spring 03 Quiz 2 Thursday, April 10, 2003
... b) the aggregate demand equation and inflation expectations set equal to previous period inflation c) the aggregate supply equation and inflation expectations set equal to previous period inflation d) the aggregate demand equation and inflation expectations set to zero 8. The modified Phillips curve ...
... b) the aggregate demand equation and inflation expectations set equal to previous period inflation c) the aggregate supply equation and inflation expectations set equal to previous period inflation d) the aggregate demand equation and inflation expectations set to zero 8. The modified Phillips curve ...
Lecture 22
... in the price level is on the vertical axis, not the price level (P) itself. The theory behind the Phillips Curve is somewhat different to the theory behind the AS curve, although the insights gained from the AS/AD analysis regarding the behavior of the price level also apply to the behavior of the i ...
... in the price level is on the vertical axis, not the price level (P) itself. The theory behind the Phillips Curve is somewhat different to the theory behind the AS curve, although the insights gained from the AS/AD analysis regarding the behavior of the price level also apply to the behavior of the i ...
Document
... Stop-Go Policy Cycle Policy that switches from expansionary to contractionary, and so on ...
... Stop-Go Policy Cycle Policy that switches from expansionary to contractionary, and so on ...
Money wage
... Monetarism took off in the 1970s •The monetarists, led by Professor Milton Friedman, experienced rising influence as inflation became public enemy number 1 in the 1970s. •Economists such as Edmund Phelps, Robert Lucas, and Thomas Seargent, subsequently added important modifications to the monetaris ...
... Monetarism took off in the 1970s •The monetarists, led by Professor Milton Friedman, experienced rising influence as inflation became public enemy number 1 in the 1970s. •Economists such as Edmund Phelps, Robert Lucas, and Thomas Seargent, subsequently added important modifications to the monetaris ...
MACROECONOMICS AND THE GLOBAL BUSINESS ENVIRONMENT
... Expectations-augmented Philips may allow for shortrun tradeoff Complications to short-run tradeoff: supply shocks ...
... Expectations-augmented Philips may allow for shortrun tradeoff Complications to short-run tradeoff: supply shocks ...
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.