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Author Question: What action should the Fed take if it wants to move from a point on the short-run Phillips curve ... (Read 54 times)

Beheh

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on: Jun 29, 2018
What action should the Fed take if it wants to move from a point on the short-run Phillips curve representing low unemployment and high inflation to a point representing higher unemployment and lower inflation?
 
  What will be an ideal response?

Question 2

If technological change occurs in the economy
 
  A) we will move up along the long-run aggregate supply curve.
  B) we will move down along the long-run aggregate supply curve.
  C) the long-run aggregate supply curve will shift to the right.
  D) the long-run aggregate supply curve will shift to the left.


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sierrahalpin

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The Fed would undertake a contractionary monetary policy. This would decrease aggregate demand, causing real GDP and the price level to both decrease. A decrease in real GDP will decrease employment, raising the unemployment rate.

Answer to Question 2

C


Beheh

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Reply 2 on: Jun 29, 2018
Gracias!

skipfourms123

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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