What is the Phillips curve? What is the difference between the original Phillips curve and the "modern" view of the Phillips curve? What problems caused the abandonment of the ideas behind the original Phillips curve?
The Phillips curve is a graph showing the relationship between unemployment and inflation. The original Phillips curve did not take into account the expected inflation rate, while the modern Phillips curve does. The stagflation (simultaneously high inflation and unemployment) that occurred during the 1970s contradicted the original Phillips curve and led to the adoption of the modern view.
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Suppose all tickets to the World Series have already been sold. Will any further sales occur if the going price rises?
A) No, and therefore a higher price will have no effect. B) No, but a smaller quantity will be demanded. C) Not unless more tickets are printed. D) Yes, as some ticket-holders sell to others. E) Yes, but the further sales will reduce the price to the original level.
Four roommates share an off-campus house and equally share the cost of rent. Everyone says that she values a clean house, yet the house is usually dirty. To an economist, a clean house in this case represents
a. a common resource problem. b. a public good. c. a club good. d. All of the above are correct.
A particular brand of toothpaste costs 4 British pounds in London. The nominal exchange rate is .80 and the real exchange rate is about 1.16 . These numbers imply that the U.S. price of the same toothpaste is about
a. $5.79 b. $4.29 c. $3.70 d. $2.76
Inflation frees policy makers from:
A. the zero interest rate upper bound. B. the 2.5 percent interest rate lower bound. C. the 2.5 percent growth rate bound. D. the zero interest rate lower bound.