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johnpaul92 johnpaul92
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8 years ago
The relationship between inflation and unemployment is given by
   π = π to power of ((e)) - 4(u - overbar(u)).
(a)   Draw a diagram showing a long-run Phillips curve and two short-run Phillips curves that contain the following points:
   A: π = .04, π to power of ((e)) = .04
   B: π = .08, π to power of ((e)) = .08
   C: π = .04, π to power of ((e)) = .08
   D: π = .08, π to power of ((e)) = .04
Label points A, B, C, and D in your diagram.
The unemployment rate at point A equals .05.
(b)   What are the values of the natural rate of unemployment and the unemployment rates at points B, C, and D?
Textbook 
Macroeconomics

Macroeconomics


Edition: 8th
Authors:
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supamansupaman
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8 years ago
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johnpaul92 Author
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#2
8 years ago
Appreciate your help, thank you again
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#3
8 years ago
Every little bit helps, right? Glad I solved your question
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