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Author Question: Using the Phillips curves, what are the short-run and long-run effects of a decrease in the ... (Read 71 times)

kwoodring

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on: Jun 29, 2018
Using the Phillips curves, what are the short-run and long-run effects of a decrease in the inflation rate?
 
  What will be an ideal response?

Question 2

An increase in demand is represented graphically by a rightward shift of the demand curve.
 
  Indicate whether the statement is true or false


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dmurph1496

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

In the short run, there is first a downward movement along the short-run Phillips curve as the inflation rate falls and the unemployment rate increases. In the long run, however, the expected inflation rate falls and the short-run Phillips curve shifts downward. Therefore in the long run the inflation rate remains low and the unemployment rate returns to the natural unemployment rate.

Answer to Question 2

TRUE


kwoodring

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

samiel-sayed

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

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