Студопедия
Случайная страница | ТОМ-1 | ТОМ-2 | ТОМ-3
АвтомобилиАстрономияБиологияГеографияДом и садДругие языкиДругоеИнформатика
ИсторияКультураЛитератураЛогикаМатематикаМедицинаМеталлургияМеханика
ОбразованиеОхрана трудаПедагогикаПолитикаПравоПсихологияРелигияРиторика
СоциологияСпортСтроительствоТехнологияТуризмФизикаФилософияФинансы
ХимияЧерчениеЭкологияЭкономикаЭлектроника

The Phillips curve describes

Читайте также:
  1. A. The article below describes the lives of two Russian teachers of English, Anya and Olga. Read the article and find out whether they are satisfied with their jobs.
  2. Behind The Curve' On Climate Risk 2/12/2015
  3. Clearly there is a change in slope in two of the curves. Such a change has been found for essentially all metals studied to date.
  4. D. The long run supply curve would not depend on the actual number of firms in the industry
  5. Decomposition of acquisition curves of isothermal remanent magnetization
  6. In the passage below George Finley, a teacher in his early forties, describes some of his experiences as a teacher.
  7. Isoprofit curve and the reaction function of firm 2.

the inverse relationship between inflation and unemployment in the economy

the relationship between unemployment and GDP

the relationship between the real interest rate and the money supply

the inverse relationship between the GDP and inflation

the inverse relationship between inflation and investment

 

The Phillips curve illustrates the relationship between the rate of inflation and the unemployment rate. When economic output falls, unemployment temporarily rises above the natural rate and the price level goes down. This is the inverse relationship between unemployment and prices that economists call the short-run Phillips curve.

Eventually, though, a surplus of workers develops, which leads to lower wages as workers start accepting lower pay. Businesses find they can lower prices to attract new sales and are able to increase hiring. This causes unemployment to move back to its natural rate in the long run. This process also works in reverse. When economic output rises, businesses expand to meet higher demand by hiring additional workers. Prices also go up because of this new demand, and the unemployment rate falls below the natural rate temporarily.

Eventually a shortage of workers develops, and workers begin to demand higher wages. When businesses are forced to pay higher wages, they instead lay off workers to protect their profit margins and the unemployment rate rises back to its natural rate. Although there is a tradeoff between unemployment and inflation in the short run, there isn't one in the long run. Workers will change their expectations when they encounter higher or lower inflation, and when they do, the unemployment rate will return to its natural rate. The short-run Phillips curve is therefore downward-sloping, while the long-run Phillips curve is vertical.


Дата добавления: 2015-10-29; просмотров: 78 | Нарушение авторских прав


Читайте в этой же книге: Multiple choice questions | When economists want to measure current production of an economy at current prices, they use | Unexpectedly high inflation _ savers and _ borrowers |
<== предыдущая страница | следующая страница ==>
Nominal Gross Domestic Product is| Cost-push inflation results in

mybiblioteka.su - 2015-2024 год. (0.01 сек.)