Question 1explain how the original phillips curve differs, Ask an Expert

Economics

Question 1

Explain how the original Phillips curve differs from the expectations-augmented Phillips curve (or the modified, or accelerationist Phillips curve).

Question 2

Explain what effect a decrease in the future expected interest rate will have on the IS curve and LM curve in the current period.

Question 3

Suppose the interest parity condition holds. Also assume that the one-year interest rate in Australia (home country) is 6% and that the one-year interest rate in Canada (foreign country) is 6%. What does this imply about the current versus future expected exchange rate (for the Australian and Canadian dollars)? Explain.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9745288

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