ch17 - CHAPTER CHECKLIST When you have completed your study...

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When you have completed your study of this chapter, you will be able toC H A P T E R C H E C K L I S TDescribe the short-run policy tradeoff between inflation and unemployment.1Distinguish between the short-run and long-run Phillips curves and describe the shifting tradeoff between inflation and unemployment.2Explain how the Fed can influence the expected inflation rate and how expected inflation influences the short-run tradeoff.3
17.1 THE SHORT-RUN PHILLIPS CURVEShort-run Phillips curveA curve that shows the relationship between the inflation rate and the unemployment rate when the natural unemployment rate and the expected inflation rate remain constant.Figure 17.1 on the next slide shows a short-run Phillips curve.
17.1 THE SHORT-RUN PHILLIPS CURVE,
17.1 THE SHORT-RUN PHILLIPS CURVE
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SRPC.A lower unemployment rate brings a higher inflation rate, such as at point
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17.1 THE SHORT-RUN PHILLIPS CURVEAggregate Supply and the Short-Run Phillips Curve
17.1 THE SHORT-RUN PHILLIPS CURVE
17.1 THE SHORT-RUN PHILLIPS CURVEUnemployment and Real GDP
17.1 THE SHORT-RUN PHILLIPS CURVE