macroeconomic policy conflicts Flashcards
1
Q
money Illusion
A
Where workers in the short run confuse nominal wages and real wages
2
Q
Adaptive expectations
A
Where workers take time to adjust their expectations of the inflation rate too match at actual inflation rate
3
Q
Short run Phillips curve
A
The apparent trade off between achieving low inflation but with high unemployment or vice versa
4
Q
Long run Phillips Curve
A
How in the long run the economy will move towards the non accelerating inflation rate of unemployment regardless of the rate of inflation
