# Macroeconomics

The Philips Curve

Suppose the economy has been experiencing zero inflation and five percent unemployment for several years. The government decides to lower the unemployment percentage by generating some inflation. You need to do the following:

1.Using the Grapher tool, create a graph showing what the short-run effects would be and what would happen in the long run.

2.Give reasons to explain what the government would have to do to keep the unemployment rate at 3 percent.

1. 👍 0
2. 👎 0
3. 👁 107
1. I don't know what your "Grapher tool" is. That said, if the economy has zero inflation and 5% unemployment for several years, that sounds like equilibrium to me. Any attempts to move to an alternative position is, very likely, doomed to fail.

1. 👍 0
2. 👎 0
2. a) you only have to explain the theory of philip curve, with the help of the diagram of philip curve which shows the trade off between inflation and unemployment in the short run and nairu in the long run, that all. you will get the graph through various search engines.

1. 👍 0
2. 👎 0
posted by aryaa

## Similar Questions

1. ### economics today

Suppose the economy has been experiencing zero inflation and five percent unemployment for several years. The government decides to lower the unemployment percentage by generating some inflation. You need to do the following:

asked by Anonymous on March 1, 2011
2. ### Macroeconomics

Suppose the economy has been experiencing zero inflation and five percent unemployment for several years. The government decides to lower the unemployment percentage by generating some inflation. You need to do the following:

asked by Joe on May 24, 2010
3. ### Economics

9. During the 1990's the inflation and unemployment trends in the United States changed. What was unusual in the 1990s? A. Unemployment reached very high levels but inflation fell to less than five percent B. although inflation

asked by Codey on May 31, 2011
4. ### macroeconomics

If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of

asked by Anonymous on March 27, 2012
5. ### Economics

1. You read the following information about the economy: Real GDP up three percent from a year ago. Unemployment rate of 6.1 percent. Consumer Price Index up six percent from a year ago. Index of Leading Indicators up for the last

asked by Jen on April 5, 2011
6. ### history

How did hitler's economic policies affect germany before world war II? 1. economic conditions improved as businesses thrived, and unemployment was reduced. 2. unemployment rose significantly as hitler pulled young men from jobs to

asked by Ciara's Sister on December 16, 2011
7. ### Economics

Suppose last month's inflation report estimated monthly inflation to be 0.4% over the month. The monetary authorities want inflation to not exceed 2% per year. Estimates of potential output state that our economy is currently near

asked by Dee on April 29, 2008
8. ### economics

Suppose last monthâ€™s inflation report estimated monthly inflation to be 0.4% over the month. The monetary authorities want inflation to not exceed 2% per year. Estimates of potential output state that our economy is currently

asked by cecy on May 17, 2014
9. ### Macroeconomics - inflation!

Hi! I had to graph inflation/unemployment... Why did the inflation rate start increasing and the unemployment rate started decreasing after 2000??? Thanks. I should let economyst answer, but I'll comment on this, If economyst

asked by Samantha on September 10, 2006
10. ### Economics

Describe three specific measures the government can use to access the health of a country's economy. Take a shot. Think. There are a plentitude of ways governments affect the health of their economies. I have some ideas but I'm

asked by Chrissy on February 12, 2007

More Similar Questions