Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(05.02 MC) Use the graph to answer the question that follows. Graph has UNP rate along the horizontal axis and inflation rate along the vertical

(05.02 MC) Use the graph to answer the question that follows. Graph has UNP rate along the horizontal axis and inflation rate along the vertical axis. A vertical line labeled LR corresponds to a horizontal axis value Uo. A second vertical line, labeled LR prime, is to the left of LR and corresponds to a horizontal axis value U1. In the accompanying graph, the long-run Phillips curve has shifted from LR to LR. Which of the following could explain this shift? (1 point) Expansionary fiscal policy that reduces unemployment and increases inflation A lower expected rate of inflation The economy moving, reaching full employment, with real GDP corresponding to long-run aggregate supply More efficient labor markets that reduce frictional unemployment and the natural rate of unemployment An inward shift in short-run aggregate supply that increases cyclical unemployment

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Theory And Practice Of Public Sector Reform

Authors: Steven Van De Walle, Sandra Groeneveld

1st Edition

1317500113, 9781317500117

More Books

Students also viewed these Economics questions

Question

5. It is the needs of the individual that are important.

Answered: 1 week ago

Question

3. It is the commitment you show that is the deciding factor.

Answered: 1 week ago