Phillips curve

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7 Terms

1
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What does Phillips curve show

Inflation rate vs Unemployment

2
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Draw Phillips curve

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3
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What shifts the SRPC curve

What does that show

Changes in costs of production

Stagflation

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What is stagflation

Where inflation is high but unemployment is also unusually high

5
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<p>Explain the next step after this shift</p>

Explain the next step after this shift

As workers are more scarce they will bargain for higher wages this increases inflation and as costs of production rise SRPC shifts outwards leading to unemployment increasing

<p>As workers are more scarce they will bargain for higher wages this increases inflation and as costs of production rise SRPC shifts outwards leading to unemployment increasing </p>
6
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What does NAIRU stand for

Non-accelerating inflation rate of unemployment

7
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How does NRU/ LRPC shift

Through changes in the quality and quantity of factors of production (Shifts in LRAS)

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