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Eco 202 ch 36 unemployment and inflation
1.
Chapter 36 ! Unemployment and Inflation
2.
Economic Cycle
3.
Saudi Inflation Rate
4.
A.W. Phillips (1914 -
1975) Phillips Curve Relationship between Inflation and Unemployment
5.
Phillips Curve A curve
that shows the short-run trade-off between unemployment and inflation
6.
George Akerlof (1940 -
) Nobel Prize 2001 "Probably the single most important macroeconomic relationship is the Phillips curve."
7.
Inflation Rate Unemployment Rate Phillips Curve 1961 1963 1962 1964 1965 1966 1967 1968
8.
Inflation Rate Unemployment Rate4% 7% 6% 2% Phillips
Curve Tradeoff High Inflation and Low Unemployment Low Inflation and High Unemployment
9.
Milton Friedman (1912 -
2006) Is there a long term relationship between Inflation and Unemployment?
10.
Inflation Rate Unemployment Rate 1961 1963 1962 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973
11.
Inflation Rate Unemployment Rate 1968 1969 1970 1971 1972 1973 No Relationship
12.
Milton Friedman (1912 -
2006) No Long Run Structural Relationship between Inflation and Unemployment
13.
Short-Run ! ! Long-Run Inflation can reduce unemployment ! Inflation
and unemployment are unrelated ! !
14.
Inflation Rate Unemployment Rate Phillips -Friedman
Curves Short-Run Long-Run No relationship because LRAS is vertical
15.
Price Level Quantity of Output P1 AD-
AS Model Aggregate Demand Short Run Aggregate Supply Y1 Y2 P2 Long Run Aggregate Supply P3
16.
Natural Rate Hypothesis The
claim that unemployment returns to its normal, or natural rate regardless of the rate of inflation
17.
Disinflation reduction in the
rate of inflation - slows down Deflation reduction in the price level go in reverse
18.
Saudi Inflation Rate Deflation Disinflation
19.
1.What is the
Phillips Curve? ! 2.What is the Friedman Curve? ! 3. Can inflation be good? ! 4.What is worse, inflation or deflation? ! 5.What is disinflation?
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