Examlex
An estimate of the short-run Phillips curve for a hypothetical economy is u = 12 - 1.5p,where u is the unemployment rate and p is the inflation rate.
a. If the natural rate of unemployment is 8 percent, what is the expected inflation rate that is consistent with this short-run Phillips curve?
b. Suppose the government passes legislation that decreases the natural rate of unemployment by two percentage points. What is the new long-term inflation rate?
Interest Rate
The interest rate is the amount charged by a lender to a borrower for the use of assets expressed as a percentage of the principal, often noted annually.
Total Investment
The overall amount of money allocated to purchasing assets or towards spending that is intended to generate future revenue.
Expected Flow
The anticipated movement or transfer of resources, information, or goods in a system over a period.
Future Benefits
The anticipated advantages or improvements in condition and well-being that are expected to occur in the future as a result of certain actions or investments.
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