Assuming that there is no long-run relationship between the inflation rate and unemployment. If this is...

Assuming that there is no long-run relationship between the inflation rate and unemployment. If this is true, then why is it that people pay such close attention to every move made by the Fed?

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Ans:-

It demonstrates connection among joblessness and swelling in long run .
It drawn lay joining harmony purposes of the economy as achieves enduring state after short run aggravations .
Therefore long run Philips bend is vertical at characteristic rate of joblessness .
Over the long haul change in economy happens in such way it returns to regular rate of joblessness .
At more elevated amount of swelling in the event that it is acclimating to an expansionary strategy and lower dimension of swelling .
It is changing in accordance with constriction arrangements if all of relentless state joined to such an extent that expansion is consistent state comparing to joblessness .
It will dependably compare to NAIRU which result is keeping long run Philips bend vertical .
People give careful consideration to each move the fed in light of the fact that over the long haul it will be at more elevated amount of swelling .
It is changing in accordance with an expansionary arrangement and it will be at lower dimension of expansion on the off chance that it is acclimating to withdrawal strategy .Hence the consideration.

ekkarill92 answered 2 years ago

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