Inflation and the Phillips curve

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  • Created by: Ritika
  • Created on: 24-02-15 16:33
Short- run Phillips curve
a downward- sloping Phillips curve showing a trade- off between reducing inflation and unemployment
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Long- run Phillips curve
a vertical Phillips curve along which trade- offs between reducing inflation and reducing unemployment are not possible
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Natural rate of unemployment
the rate of unemployment when the aggregate labour market is in equilibrium.
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Phillips curve
based on evidence from the economy, showing the relationship between the rate of inflation and the level of unemployment.
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Cost push inflation
caused by rising business costs of production
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demand pull inflation
caused by excess demand for output
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Other cards in this set

Card 2

Front

a vertical Phillips curve along which trade- offs between reducing inflation and reducing unemployment are not possible

Back

Long- run Phillips curve

Card 3

Front

the rate of unemployment when the aggregate labour market is in equilibrium.

Back

Preview of the back of card 3

Card 4

Front

based on evidence from the economy, showing the relationship between the rate of inflation and the level of unemployment.

Back

Preview of the back of card 4

Card 5

Front

caused by rising business costs of production

Back

Preview of the back of card 5
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