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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.
What effect did Fords economic policy have of the economy?
inflation went down, but unemployment remained high
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 happend to the economy during stagflation?
In stagflation, you have high inflation, high unemployment, and low demand.
What fiscal policy would cure high inflation and high unemployment?
A fiscal policy that focuses on job creation would cure high inflation and high unemployment. Implementing projects like road and bridge construction would improve employment rates.
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.
What effect did Fords economic policy have of the economy?
inflation went down, but unemployment remained high
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 happend to the economy during stagflation?
In stagflation, you have high inflation, high unemployment, and low demand.
What fiscal policy would cure high inflation and high unemployment?
A fiscal policy that focuses on job creation would cure high inflation and high unemployment. Implementing projects like road and bridge construction would improve employment rates.
What happened to the economy during stagflation?
Higher rates of inflation, decrease in business productivity, high unemployment
When there is high inflation in country what are the measures taken by nation govt?
Govt measures inflation status by using economic policy instrument, fiscal and monetary policy directed toward market structure and the level of unemployment rate in the economy, because inflation and unmployment are corrolated. Finaly Govt mesure unemployment through inflation and inflation through unemployment.
What is the typical relationship between inflation and unemployment?
The typical relationship between inflation and unemployment is known as the Phillips curve. It suggests that there is an inverse relationship between the two - when inflation is high, unemployment tends to be low, and vice versa. This means that as one decreases, the other tends to increase.
Can you have both inflation and recession occurring simultaneously?
Yes, it is possible to have both inflation and recession occurring simultaneously. This situation is known as stagflation, where there is a combination of high inflation and high unemployment or economic stagnation.
Is there an inverse relationship between unemployment and inflation?
Yes, there is often an inverse relationship between unemployment and inflation, commonly illustrated by the Phillips Curve. This economic theory suggests that when unemployment is low, inflation tends to be high due to increased demand for goods and services, leading to higher prices. Conversely, when unemployment is high, inflation tends to decrease as demand weakens. However, this relationship can vary over time and may not hold in all economic conditions.
What effect did ford's economic policy have on economy?
Inflation went down due to spending cuts, but unemployment remained high under Ford's economic policy.
Do monetarists argue that the Natural rate of unemployment can be reduced by macroeconomic policies designed to stimulating aggregated demand?
They do, but inflation will result, the monetarist view of the natural rate is that it is the non accelerating inflation rate of unemployment (NAIRU) to move below this will result in high inflation and is therefore not worth the benefit of the reduced unemployment.
