Evaluate How Expectations Affect The Actual Relationship

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All actions on the part of monetary and fiscal policymakers that are undertaken in response to or in anticipation of some change in the overall economy Policymaking that is carried out in response to a rule Not in response to an actual or potential change in overall economic activity.

9. Adjusting expectation’s And A shifting Phillip’s curve: The greater the unexpected increase in aggregate demand, the greater the amount of inflation that results in the short run, and the lower the unemployment rate. The greater the unexpected decrease in aggregate demand, the greater the deflation that results in the short run, and the higher the unemployment rate.

10. Evaluate how expectations affect the actual relationship

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