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Lecture Notes 1 - inverse relationship – the Phillips...

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Macroeconomics: 21/03/11 Ideal macroeconomic factors: high employment, high price stability/low inflation, high growth in GDP Inflation, unemployment axis Is there a trade-off between unemployment levels and inflation rates? A 30 year period in the states would have a negative correlation trend in a scatter diagram, indicating an
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Unformatted text preview: inverse relationship – the Phillips Curve o This graph assumes there is a trade off between unemployment and inflation – large macroeconomic factors • High inflation and high unemployment: stagflation o 1973-1978: oil price issues...
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