When the Natural Unemployment Rate Changes, What Happens to the Short-Run

question 99

Essay

When the natural unemployment rate changes, what happens to the short-run Phillips curve? To the long-run Phillips curve?

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Definitions:

Deadweight Loss

An economic efficiency decrement occurs when there's a failure to achieve or inability to achieve an equilibrium for a particular good or service.

Market Distortion

An economic phenomenon where external factors lead to a deviation from the expected or efficient allocation of resources, often causing prices to be higher or lower than they would be in a free market.

Taxed

Subjected to a compulsory financial charge or levy by governmental organizations for the funding of state expenditures.

Worse Off

A situation or condition in which an individual or group is in a less favorable position than before.