Question

3.   When the unemployment rate is above the natural rate then inflationary expectations fall and we move to lower short run Phillip’s curves. The opposite occurs when we are operating below the natural rate. You must draw a graph for this question.

4.   Excess reserves are at about $2.5 trillion. As soon as banks begin to loan out this money we are going to experience hyperinflation.

5. Graph only. Label Axes, all curves and equilibrium. Explain briefly every curve shift.

A DAD-DAS graph, IS-LM graph, and either an AS-AD graph, or Aggregate Expenditure graph are required.

We are currently operating below NAIRU at full employment. Due to the chaos caused by the tariffs, consumer as well as business confidence wanes and unemployment rises to 6.5%, the government’s built-in stabilizers take effect, and the government uses the appropriate amount of discretionary fiscal policy. The Fed changes its current policy of slowing money growth and returns to a more normal money growth.   

Answer 1

3) This is related to Philips curve. Please follow this link for detailed description. The explanation provided here is detaied and clear.

https://courses.lumenlearning.com/boundless-economics/chapter/the-relationship-between-inflation-and-unemployment/

You can also read further on this link : https://www.economicshelp.org/blog/1364/economics/phillips-curve-explained/

4) The question here is incomplete . Please provide further explanation for the question which needs to be answered.