The Phillips Curve
The curve illustrating the short-run trade-off between inflation and unemployment
What is the short-run Phillips curve?
This occurs when government spending exceeds tax revenue in a single fiscal year
What is a budget deficit?
Economic growth is graphically represented by an outward shift of this curve
What is the production possibilities curve?
This specific account records a nation's exports and imports of goods and services
What is the current account?
The price of one nation's currency expressed in terms of another nation's currency
What is the exchange rate?
An increase in expected inflation will cause the short-run Phillips curve to shift in this direction
What is to the right?
The accumulation of all past budget deficits and surpluses
What is the national debt?
This activity increases the amount of capital goods available per worker, which increases productivity
What is capital investment?
A country that imports more goods and services than it exports is said to have this type of balance
What is a trade deficit?
If the US dollar buys fewer European euros today than it did yesterday, the dollar has experienced this
What is depreciation?
In the long run, the Phillips curve is vertical at this specific economic rate
What is the natural rate of unemployment?
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Investment in education, training, and health care builds this specific type of capital
What is human capital?
The purchase of foreign assets by domestic residents and the sale of domestic assets to foreigners are recorded in this account
What is the capital and financial account?
An increase in real interest rates in the United States will cause the demand for the US dollar in the FOREX market to do this
What is increase?
A negative supply shock, which causes stagflation, shifts the short-run Phillips curve in this direction
What is to the right?
When government borrowing increases interest rates and decreases private investment, it is known by this term
What is crowding out?
Government policies that focus on lowering taxes on businesses to increase investment and long-run economic growth
What are supply-side policies?
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If the Japanese yen appreciates against the US dollar, United States net exports to Japan will likely do this
What is increase?
According to the long-run Phillips curve, there is no trade-off between inflation and this metric in the long run
What is unemployment?
To finance a deficit, the government typically sells these financial instruments to the public
What are government bonds?
In the quantity theory of money equation (M x V = P x Y), the variable "V" stands for this
What is the velocity of money?
According to the balance of payments identity, the sum of the current account and the capital and financial account must mathematically equal this number
What is zero?
If a country imposes a strict quota on imported goods, the supply of its currency in the FOREX market will shift in this direction
What is to the left?