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The short-run Phillips curve represents the relationship between the unemployment rate and the rate of change in
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- 1. measures the rate of inflation2. allows us to make international comparisons3. indicator of country/government's performance4. used in wage negotiations
- Imagine the U.S. economy is in long-run equilibrium. Then suppose the value of the U.S. dollar increases. At the same time, people in the U.S. revise their expectations so that the expected price level falls. We would expect that in the short-run1)the price level will fall, and real GDP might rise, fall, or stay the same.2)real GDP will fall and the price level might rise, fall, or stay the same.3)the price level will rise, and real GDP might rise, fall, or stay the same.4)real GDP will rise and the price level might rise, fall, or stay the same.
- Indicate which component of GDP will be affected by each of the following transactions involving the Ford Motor Company.a. You purchase a new Ford Escape Hybrid from a Ford dealer. b. You purchase a 2013 (preowned) Ford Escape Hybrid from a friend. c. Ford purchases door handles for the Escape from an auto parts manufacturer in Indiana. d. Ford produces 1,000 Escapes in a factory in Missouri and ships them to a car dealer in Shanghai, China. e. Ford purchases new machine tools to use in its Missouri Escape factory. f. The state of Missouri builds a new highway to help improve access to the Ford Escape plant.