Graph the Phillips relation t = 2.8% 0.16t with inflation on the vertical axis and unemployment
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Graph the Phillips relation πt = 2.8% − 0.16µt with inflation on the vertical axis and unemployment on the horizontal axis. Calculate and interpret the intercept on the vertical axis. Why might this be an undesirable economic outcome? Calculate and interpret the intercept on the horizontal axis. Why might this be an undesirable economic outcome? What is the unemployment rate if inflation is 2%?
Related Book For
Macroeconomics A European Perspective
ISBN: 9781292360898
4th Edition
Authors: Olivier Blanchard, Alessia Amighini, Francesco Giavazzi
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