Problem
1. Long-Run Phillips Curve Suppose the economy is at point d on the long-run Phillips curve shown. If that inflation rate is unacceptably high, how can policy makers get the inflation rate down? Would rational expectations help or hinder their efforts?
2. Global Economic Watch Go to the Global Economic Crisis Resource Center and select Global Issues in Context. In the Basic Search box at the top of the page, enter the phrase "policy credibility." On the Results page, go to the News Section. Click on the link for the September 24, 2010, article "Research Conducted at Chongqing University Has Provided New Information About Economic Psychology." Does the research described support the importance of policy credibility?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.