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A decline in the price of imported oil

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Reference no: EM13319292

1. Illustrate the effects of the following developments on both the short-run and long-run Phillips curves. Give the economic reasoning underlying your answers.

a. a rise in the natural rate of unemployment

b. a decline in the price of imported oil

c. a rise in government spending d. a decline in expected inflation

2. Draw the short-run tradeoff between inflation and unemployment. How might the Fed move the economy from one point on this curve to another?

Reference no: EM13319292

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