In an economy, the natural unemployment rate is 7 percent and the expected inflation rate is 4 percent a year. Draw a point at the natural unemployment rate and the expected inflation. Draw a short-run Phillips curve. Label it SRPC Draw the long-run Phillips curve. Label it LRPC. Inflation rate (percent per year) 8.0- LRPO 7.0 6.0 5.0- 4.0- 3.0 20 1.0- 0.0+ 3 6 10 Unemployment rate (percent of labor force) >>> Draw only the objects specified in the question. G

Exploring Economics
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ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
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In an economy, the natural unemployment rate is 7 percent and the expected inflation rate is 4
percent a year.
Draw a point at the natural unemployment rate and the expected inflation.
Draw a short-run Phillips curve. Label it SRPC
Draw the long-run Phillips curve. Label it LRPC.
Inflation rate (percent per year)
8.0-
LRPO
7.0
6.0
5.0-
4.0-
3.0
20
1.0-
0.0+
3
6
10
Unemployment rate (percent of labor force)
>>> Draw only the objects specified in the question.
G
Transcribed Image Text:In an economy, the natural unemployment rate is 7 percent and the expected inflation rate is 4 percent a year. Draw a point at the natural unemployment rate and the expected inflation. Draw a short-run Phillips curve. Label it SRPC Draw the long-run Phillips curve. Label it LRPC. Inflation rate (percent per year) 8.0- LRPO 7.0 6.0 5.0- 4.0- 3.0 20 1.0- 0.0+ 3 6 10 Unemployment rate (percent of labor force) >>> Draw only the objects specified in the question. G
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