5) Philips curve and monetary policy
a) Show on a graph how short-run and long-run Philips curve
relates to the ASAD model. How a shock to the aggregate supply can
affect the Phillips curve? (11.3 marks)
b) Discuss Friedman’s idea of the long-run versus short-run
Phillips curve by including the idea of natural unemployment rate
and the role of expected inflation. What is the sacrifice ratio?
c) Explain the idea of rational expectations, inflation
targeting, and the Taylor rule.
d)...
Virgin was founded in 1970 by Richard Branson and is classified as a holding company for multiple ventures under the Virgin Group. When it comes to innovation Virgin is one of the top companies in the world. What began as a mail order record company has evolved into one of the most diverse companies in existence. Virgin invests in and builds companies that revolve around delivering fantastic customer experience and change the scope of industries. They do everything from space...
a) Explain the relationship between unemployment and inflation
using the concept of Philips curve. What are the critics on Philips
Curve?
b) Use the Phillips Curve to explain policy responses to a
supply shock caused by increase in the world price of oil
c) Discuss Walras's Law statement that the sum of the nominal
excess demands for all goods in the economy must be zero.
Apply the
augmented Philips curve policy lesson to the suggestion that the
SARB prints the money. Make use of
graphs and explain what the impact might be on output and
inflation.
What is the policy mix? Explain . How can policy makers use
their policy instruments to achieve their domestic policy goals? In
your answer explain how macro-policy can be used to combat the
problems of recession, overheating, and stagflation.
What lessons can we all learn from a disaster? What would be
your plan to minimize loss of life and property if the disaster
occurred locally?Please describe short-term and long-term effects
of a natural disasters on the economy.
What lessons can we learn from government sponsored programs
such as Medicare, Medicaid, and the VA System about the problems
facing fixed-budget health care systems? Should the healthcare
system be operated on a fixed budget?