0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What does the Phillip's Curve illustrate?
A graph that shows that there is a relation between unemployment and inflation: One can either have a high inflation and low unemployment or low inflation with high unemployment.
If inflation falls why would unemployment rise?
When economists look at inflation and unemployment in the short term, they see a rough inverse correlation between the two. When unemployment is high, inflation is low and when inflation is high, unemployment is low. This has presented a problem to regulators who want to limit both. This relationship between inflation and unemployment is the Phillips curve. The short term Phillips curve is a declining one. Fig 2.4.1-Short term Phillips curveThis is a rough estimation of a short-term Phillips curve. As you can see, inflation is inversely related to unemployment. The long-term Phillips curve, however, is different. Economists have noted that in the long run, there seems to be no correlation between inflation and unemployment.
What are disadvantages of Inflation?
according to my thinkings, Inflation can lead to high unemployment rate, low GDP, less exports, fall in exchange rate and also loss of international competitiveness............BY:: Hamunyela Oiva, UNAM student,windhoek...
What is the inverse relationship between inflation and unemployment rates?
They are inversely related. High unemployment means lots of people don't have jobs. Because they don't have jobs their incomes are low. Low incomes means they can't spend much money on products. This means that demand in the economy will fall. This fall in demand will drive producers to lower prices...and therefore inflation falls. So... High unemployment = low inflation Low unemloyment = higher inflation
What are two features of sustainable economic growth?
Low and stable inflation rate. Low unemployment rate.
What typically happens to the inflation rate when unemployment falls to very low levels?
it rises
What will most likely spur concession bargaining?
high inflation, low unemployment, high profit, or low turnover
What are the main goal of macroeconomics?
To promote economic growth To manage unemployment to low levels To manage inflation to low levels
What happend to the economy during stagflation?
In stagflation, you have high inflation, high unemployment, and low demand.
What did the existence of low inflation and low unemployment in 1900s puzzle some economists?
Because unemployement fell to its lowest level in decades, and inflation crept along at less than 3%
How is inflation and employment levels related?
Inflation causes people to save on everything. This makes commerce to sell less. Selling less causes unemployment. Unemployment and low consumption cause recession. No inflation implies on high consumption which must be controlled as well, but is much better than inflation and recession.
Why is the economy in Luxembourg so good?
luxembourg's stable, high-income economy features moderate growth, low inflation, and low unemployment.
