Asked by Gaoussou Doucoure on Jun 10, 2024
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An increase in the natural rate of unemployment shifts the long-run Phillips curve to the right.
Natural Rate
The rate of unemployment when the labor market is in equilibrium, reflecting the number of people who are jobless due to the natural turnover in the workforce.
Long-Run Phillips Curve
A concept suggesting that in the long run, there is no trade-off between inflation and unemployment, with the curve being vertical at the natural rate of unemployment.
Unemployment Shifts
Refers to changes in the unemployment rate due to economic fluctuations, policy changes, or other external factors.
- Understand the determinants and concept of the natural rate of unemployment.
- Embark on comprehending the Phillips curve's relevance in transient and enduring timeframes.
Verified Answer
Learning Objectives
- Understand the determinants and concept of the natural rate of unemployment.
- Embark on comprehending the Phillips curve's relevance in transient and enduring timeframes.
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