객관식
The short run Phillips curve illustrates which relationship?
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20. Tradeoffs Between Inflation and Unemployment
Short Run Phillips Curve
객관식
When the domestic currency depreciates, which of the following best describes the effect on the short-run Phillips curve?
A
There is no change in the position of the Phillips curve.
B
The Phillips curve becomes vertical, indicating no trade-off between inflation and unemployment.
C
The Phillips curve shifts to the right, indicating higher inflation at each unemployment rate.
D
The Phillips curve shifts to the left, indicating lower inflation at each unemployment rate.
검증된 단계별 안내1
Step 1: Understand the short-run Phillips curve (SRPC) concept, which shows the inverse relationship between inflation and unemployment in the short run. A movement along the curve reflects a trade-off between inflation and unemployment.
Step 2: Recognize that a depreciation of the domestic currency makes imports more expensive, which tends to increase the overall price level and thus inflation, holding unemployment constant.
Step 3: Analyze how this increase in inflation at every level of unemployment affects the SRPC. Since inflation rises for the same unemployment rate, the entire curve shifts.
Step 4: Determine the direction of the shift. Higher inflation at each unemployment rate means the SRPC shifts to the right, indicating a higher inflation rate for any given unemployment rate.
Step 5: Conclude that the depreciation of the domestic currency causes the short-run Phillips curve to shift to the right, reflecting increased inflation pressures in the economy.
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