Does the short-run Phillips curve have a positive or negative slope? Explain how this slope is derived
What will be an ideal response?
The short-run Phillips curve has a negative slope, indicating that there is a trade-off between inflation and unemployment. When aggregate demand rises, inflation and real GDP both rise in the short run. As real GDP rises above potential GDP, unemployment begins to fall below its natural rate. The result is higher inflation and a lower rate of unemployment.
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Which of the following is NOT a complement for automobiles?
A. Gasoline to run the car B. Price of the car C. The insurance for the car D. The cost of the financing for the car
An inverted yield curve is a valuable forecasting tool because:
A. investors are expecting higher short-term rates in the future, and this usually signals an economic slowdown. B. inverted yield curves signal better economic times are expected. C. the yield curve usually is inverted so it reflects a growing economy. D. the yield curve seldom is inverted and can signal an economic slowdown.
Collin has lost his job with a telemarketing company, which has moved its operation to India. Collin is considered
A) structurally unemployed. B) frictionally unemployed. C) seasonally unemployed. D) a discouraged worker.
When a firm experiences declining long-run average total costs as it produces more output, there are
A) increasing marginal returns to variable inputs. B) economies of scale. C) diseconomies of scale. D) constant returns to scale.