Philips curve

Philips curve
Directions: On the graph below, place labels and values ranging from 0% to 10% on both the horizontal and vertical axes. For the scenarios described, draw a point on your graph and label it with the appropriate letter. Correspond to the scenario it illustrates.  If the scenario describes something that would shift the Phillips Curve, draw a new curve and label it with the appropriate letter.  Some scenarios will lead to the same outcome as others; in these cases put multiple letters next to each point.  Provide a brief explanation of why the scenario leads to the change you identified.

Scenarios

a. The economy is stable with unemployment at 6% and inflation at 2%. (For the following scenarios, assume the economy starts at this point)!!

b. A decrease in interests rats causes investment to increase.
Draw & Explain:

c. an appreciation of the nation’s currency leads foreigners to demand less of the country’s exports.
Draw & Explain

d. The discovery of large reserves of natural gas causes energy prices to decline.
Draw & Explain:

e. an earthquake strikes, destroying much of the nation’s transportation infrastructure.
Draw & Explain:

f. Home prices decline, harming consumer and investor confidence.
Draw & Explain:

g. The government reduces payroll taxes by 2% for all households.
Draw & Explain:

h. Fear over the national debt forces government to reduce its budget deficit.
Draw & Explain:

i. The EPA requires all the nation’s producers to adhere to strict new greenhouse gas emissions standards.
Draw & Explain:

j. Looser immigration laws increase the available supply of labor in the country.
Draw & Explain:

k. Rapid economic growth abroad boosts demand for the nation’s output.
Draw & Explain:

l. Create your own scenario: