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Author Question: If expectations are adaptive, how will the economy adjust to a new long-run equilibrium in response ... (Read 22 times)

plus1

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on: Mar 16, 2019

Question 1

Figure 17-5









Refer to Figure 17-5. Consider the Phillips curves shown in the above graph. We can conclude from this graph that


◦ the natural rate of unemployment in this economy is 5.5 percent.
◦ the expected rate of inflation in this economy is 10 percent.
◦ ceteris paribus, a fall in the rate of inflation to 5 percent will increase unemployment to 7.5 percent in the short run.
◦ All of these are correct.

Question 2

If expectations are adaptive, how will the economy adjust to a new long-run equilibrium in response to expansionary monetary policy? Support your answer with a graph of the Phillips curve.

Macroeconomics ¦ Hubbard, O'Brien ¦ 6th Edition
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Marked as best answer by plus1 on Mar 16, 2019

Toya9913

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Reply #1 on: Mar 16, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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plus1

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Reply 2 on: Mar 16, 2019
YES! Correct, THANKS for helping me on my review

isabelt_18

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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