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Macro economics Word Scramble


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Macro economics

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PHILIPS CURVE the original curve posited a negative relationship between wages and unemployment, but late versions related unemployment to inflation rates.
The basic relationship among wages, prices, and productivity is p = w - q
P=W=q= p= rate of inflationw= rate of increase in nominal wagesq= rate of increase in labor productivity
Natural rate of unemployment the level of unemployment where price and wage decisions are consistent; a level at which the actual inflation rate is equal to people's inflationary expectations, and cyclical unemployment is zero.
w= f(u)+p^e
w=f(u)(read "a function of unemploiment")P^e w= wage increasef(u)= relationship between unemployment and wage increasesP^e= inflationary expectations
Created by: Yareth Lopez Yareth Lopez on 2009-12-08

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