Question: 4. Explain the Phillips curve model. What is it showing a relation between in the SR? What is different in the LR? On 3

4. Explain the Phillips curve model. What is it showing a relation

4. Explain the Phillips curve model. What is it showing a relation between in the SR? What is different in the LR? On 3 different neatly drawm Phillips curve graphs show an economy at FE (A), in a recessionary/negative output gap (B), and in an inflationary/positive output gap (C). Also, in words, explain what happens on the Phillips curve model in each of the following scenarios: 1. AD increases; 2. AD decreases; 3. AS increases; 4. AS decreases (1 pt.)

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