Monetary or fiscal policy-consider the phillips curve

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When you look at monetary or fiscal policy, it’s important to consider the Phillips curve.

A. Explain what the short-run Phillips curve is and why it is important in thinking about economic policy.

B. Explain what stagflation is and why stagflation is inconsistent with the idea of a Phillips curve.

C. Explain the short-run relationship between the Phillips curve and changes in aggregate demand in the AD/AS model.

D. Discuss the relationship between the long-run AS curve and the long-run Phillips curve.

E. Explain the difference between the short-run and long-run Phillips curves. What do they imply about the trade off between inflation and unemployment in the short run and in the long run?

Reference no: EM13994475

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