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AP Macroeconomics Flashcards: The Phillips Curve

Study The Phillips Curve in AP Macroeconomics with focused flashcards that help you recognize the idea, recall the key rule, and apply it in practice-style prompts.

← Back to flashcard decks

What this deck covers

This deck focuses on The Phillips Curve, giving you a quick way to review the definitions, rules, and examples that matter most for AP Macroeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

AP Macroeconomics Flashcards: The Phillips Curve

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QUESTION

If expansionary policy lowers unemployment in the short run, what happens to inflation in the short run?

Tap or drag to reveal answer

ANSWER

Inflation rises as the economy moves up along the SRPC. Moving left and up along SRPC shows the inflation-unemployment trade-off.

Swipe Right = I Know It! 🎉

Swipe Left = Still Learning

All flashcards

Flashcard 1: If expansionary policy lowers unemployment in the short run, what happens to inflation in the short run?

Answer: Inflation rises as the economy moves up along the SRPC. Moving left and up along SRPC shows the inflation-unemployment trade-off.

Flashcard 2: If contractionary policy lowers inflation in the short run, what happens to unemployment in the short run?

Answer: Unemployment rises as the economy moves down along the SRPC. Moving right and down along SRPC shows the trade-off working in reverse.

Flashcard 3: If unemployment is below $u_n$ , what happens to inflation over time as expectations adjust?

Answer: Inflation tends to rise; SRPC shifts up until unemployment returns to $u_n$ . Tight labor markets drive wages and prices up, shifting SRPC upward.

Flashcard 4: If unemployment is above $u_n$ , what happens to inflation over time as expectations adjust?

Answer: Inflation tends to fall; SRPC shifts down until unemployment returns to $u_n$ . Slack labor markets reduce wage pressure, shifting SRPC downward.

Flashcard 5: If $u=u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about inflation?

Answer: $\pi=\pi^e$ . At natural rate with no shocks, actual equals expected inflation.

Flashcard 6: If $u<u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Answer: $\pi>\pi^e$ . Low unemployment creates upward pressure on wages and prices.

Flashcard 7: If $u>u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Answer: $\pi<\pi^e$ . High unemployment creates downward pressure on wages and prices.

Flashcard 8: If $v>0$ in $\pi=\pi^e-\beta(u-u_n)+v$ , how does inflation change, holding $u$ and $\pi^e$ fixed?

Answer: $\pi$ increases (SRPC shifts left/up). Positive supply shock directly raises inflation.

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AP Macroeconomics Flashcards: The Phillips Curve

Study The Phillips Curve in AP Macroeconomics with focused flashcards that help you recognize the idea, recall the key rule, and apply it in practice-style prompts.

← Back to flashcard decks

What this deck covers

This deck focuses on The Phillips Curve, giving you a quick way to review the definitions, rules, and examples that matter most for AP Macroeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

AP Macroeconomics Flashcards: The Phillips Curve

/ 8

0 reviewed

0% Complete

0 reviewing

QUESTION

If expansionary policy lowers unemployment in the short run, what happens to inflation in the short run?

Tap or drag to reveal answer

ANSWER

Inflation rises as the economy moves up along the SRPC. Moving left and up along SRPC shows the inflation-unemployment trade-off.

Swipe Right = I Know It! 🎉

Swipe Left = Still Learning

All flashcards

Flashcard 1: If expansionary policy lowers unemployment in the short run, what happens to inflation in the short run?

Answer: Inflation rises as the economy moves up along the SRPC. Moving left and up along SRPC shows the inflation-unemployment trade-off.

Flashcard 2: If contractionary policy lowers inflation in the short run, what happens to unemployment in the short run?

Answer: Unemployment rises as the economy moves down along the SRPC. Moving right and down along SRPC shows the trade-off working in reverse.

Flashcard 3: If unemployment is below $u_n$ , what happens to inflation over time as expectations adjust?

Answer: Inflation tends to rise; SRPC shifts up until unemployment returns to $u_n$ . Tight labor markets drive wages and prices up, shifting SRPC upward.

Flashcard 4: If unemployment is above $u_n$ , what happens to inflation over time as expectations adjust?

Answer: Inflation tends to fall; SRPC shifts down until unemployment returns to $u_n$ . Slack labor markets reduce wage pressure, shifting SRPC downward.

Flashcard 5: If $u=u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about inflation?

Answer: $\pi=\pi^e$ . At natural rate with no shocks, actual equals expected inflation.

Flashcard 6: If $u<u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Answer: $\pi>\pi^e$ . Low unemployment creates upward pressure on wages and prices.

Flashcard 7: If $u>u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Answer: $\pi<\pi^e$ . High unemployment creates downward pressure on wages and prices.

Flashcard 8: If $v>0$ in $\pi=\pi^e-\beta(u-u_n)+v$ , how does inflation change, holding $u$ and $\pi^e$ fixed?

Answer: $\pi$ increases (SRPC shifts left/up). Positive supply shock directly raises inflation.

Opening subject page...

AP Macroeconomics Flashcards: The Phillips Curve

What this deck covers

How to use these flashcards

AP Macroeconomics Flashcards: The Phillips Curve

All flashcards

Flashcard 1: If expansionary policy lowers unemployment in the short run, what happens to inflation in the short run?

Flashcard 2: If contractionary policy lowers inflation in the short run, what happens to unemployment in the short run?

Flashcard 3: If unemployment is below unu_nun​, what happens to inflation over time as expectations adjust?

Flashcard 4: If unemployment is above unu_nun​, what happens to inflation over time as expectations adjust?

Flashcard 5: If u=unu=u_nu=un​ and v=0v=0v=0, what does π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v imply about inflation?

Flashcard 6: If u<unu<u_nu<un​ and v=0v=0v=0, what does π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v imply about π\piπ relative to πe\pi^eπe?

Flashcard 7: If u>unu>u_nu>un​ and v=0v=0v=0, what does π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v imply about π\piπ relative to πe\pi^eπe?

Flashcard 8: If v>0v>0v>0 in π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v, how does inflation change, holding uuu and πe\pi^eπe fixed?

Opening subject page...

AP Macroeconomics Flashcards: The Phillips Curve

What this deck covers

How to use these flashcards

AP Macroeconomics Flashcards: The Phillips Curve

All flashcards

Flashcard 1: If expansionary policy lowers unemployment in the short run, what happens to inflation in the short run?

Flashcard 2: If contractionary policy lowers inflation in the short run, what happens to unemployment in the short run?

Flashcard 3: If unemployment is below unu_nun​, what happens to inflation over time as expectations adjust?

Flashcard 4: If unemployment is above unu_nun​, what happens to inflation over time as expectations adjust?

Flashcard 5: If u=unu=u_nu=un​ and v=0v=0v=0, what does π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v imply about inflation?

Flashcard 6: If u<unu<u_nu<un​ and v=0v=0v=0, what does π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v imply about π\piπ relative to πe\pi^eπe?

Flashcard 7: If u>unu>u_nu>un​ and v=0v=0v=0, what does π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v imply about π\piπ relative to πe\pi^eπe?

Flashcard 8: If v>0v>0v>0 in π=πe−β(u−un)+v\pi=\pi^e-\beta(u-u_n)+vπ=πe−β(u−un​)+v, how does inflation change, holding uuu and πe\pi^eπe fixed?

Flashcard 3: If unemployment is below $u_n$ , what happens to inflation over time as expectations adjust?

Flashcard 4: If unemployment is above $u_n$ , what happens to inflation over time as expectations adjust?

Flashcard 5: If $u=u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about inflation?

Flashcard 6: If $u<u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Flashcard 7: If $u>u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Flashcard 8: If $v>0$ in $\pi=\pi^e-\beta(u-u_n)+v$ , how does inflation change, holding $u$ and $\pi^e$ fixed?

Flashcard 3: If unemployment is below $u_n$ , what happens to inflation over time as expectations adjust?

Flashcard 4: If unemployment is above $u_n$ , what happens to inflation over time as expectations adjust?

Flashcard 5: If $u=u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about inflation?

Flashcard 6: If $u<u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Flashcard 7: If $u>u_n$ and $v=0$ , what does $\pi=\pi^e-\beta(u-u_n)+v$ imply about $\pi$ relative to $\pi^e$ ?

Flashcard 8: If $v>0$ in $\pi=\pi^e-\beta(u-u_n)+v$ , how does inflation change, holding $u$ and $\pi^e$ fixed?