1. Draw a graph to illustrate the following: a. A Phillips Curve based on the assumption of a vertical longrun aggregate supply curve b. The effect of a change in inflationary expectations on a recently stable Phillips Curve c. Unemployment caused by a recently enacted minimum wage law
2. Obtain data on "average hourly earnings of production workers" and the unemployment rate for your state or area over a recent 2-year period. Has unemployment increased or decreased? What has happened to wages? Does the pattern of unemployment help explain the movement of wages? Provide an explanation.