Assignment 9
This information is on page 100-102 in the $5 notes.
This information is on pages 781-796 in the textbook.
This assignment is a new concept; the Phillips Curve. The Phillips curve demonstrates the relationship between inflation and unemployment. On the y-axis (the vertical axis) we label inflation rate, on the x - axis we label unemployment rate. As you have already learned there is an inverse relationship between inflation and unemployment, when inflation goes up unemployment tends to go down and vice -versa. However, this is in the short run. Therefore we have a short run phillips curve which demonstrates this, and a long run phillips curve which shows no tradeoff between the two. Because as we know in the long run inflation is a monetary phenomena, (meaning we have inflation because there is too much money, think the bean game) and in the long run unemployment tends to gravitate to the natural rate of unemployment, (meaning it returns to the Long Run Aggregate Supply curve.) The videos from AC DC economics on this are very important to watch. Notice the interaction between the Aggregate Supply / Aggregate Demand graphs and the Phillips Curve. Also notice that when the Short Run Aggregate Supply curve shifts to the left in the video, the short run Phillips Curve shifts to the right. They are like a mirror of one another and the reason for this is because on the Aggregate Supply / Aggregate Demand model we are measuring EMPLOYMENT (REAL GDP) on the x-axis, but on the Philips Curve axis we are measuring UNEMPLOYMENT on the x- axis. Make sure to watch the videos before attempting the worksheet.
https://www.youtube.com/watch?v=jFKZqi1Bl-k
www.youtube.com/watch?v=zatnIhwmu1c
And the worksheet
documentcloud.adobe.com/link/track?uri=urn%3Aaaid%3Ascds%3AUS%3A1c9a59fd-f219-4e2f-9909-c6f5138211c8
This information is on pages 781-796 in the textbook.
This assignment is a new concept; the Phillips Curve. The Phillips curve demonstrates the relationship between inflation and unemployment. On the y-axis (the vertical axis) we label inflation rate, on the x - axis we label unemployment rate. As you have already learned there is an inverse relationship between inflation and unemployment, when inflation goes up unemployment tends to go down and vice -versa. However, this is in the short run. Therefore we have a short run phillips curve which demonstrates this, and a long run phillips curve which shows no tradeoff between the two. Because as we know in the long run inflation is a monetary phenomena, (meaning we have inflation because there is too much money, think the bean game) and in the long run unemployment tends to gravitate to the natural rate of unemployment, (meaning it returns to the Long Run Aggregate Supply curve.) The videos from AC DC economics on this are very important to watch. Notice the interaction between the Aggregate Supply / Aggregate Demand graphs and the Phillips Curve. Also notice that when the Short Run Aggregate Supply curve shifts to the left in the video, the short run Phillips Curve shifts to the right. They are like a mirror of one another and the reason for this is because on the Aggregate Supply / Aggregate Demand model we are measuring EMPLOYMENT (REAL GDP) on the x-axis, but on the Philips Curve axis we are measuring UNEMPLOYMENT on the x- axis. Make sure to watch the videos before attempting the worksheet.
https://www.youtube.com/watch?v=jFKZqi1Bl-k
www.youtube.com/watch?v=zatnIhwmu1c
And the worksheet
documentcloud.adobe.com/link/track?uri=urn%3Aaaid%3Ascds%3AUS%3A1c9a59fd-f219-4e2f-9909-c6f5138211c8