Problem
Conceptual Macroeconomics questions
• How does the aggregate supply and phillips curves are related to each other. Can any information be derived from one that cannot be derived from the other?
• How do short-and long-term phillips curves differ? (Hint: In the long run, we return to a classical world.)
• Explain how the ability of inflation expectations to shift the phillips curve helps the economy to adjust, automatically, to aggregate supply and demand shocks.