Chapter 35 - The Short-Run Trade-Off Between Inflation and Unemployment

Disinflation

________: reduction in the rate of inflation (as opposed to deflation, a reduction in the price level)

Rate of Change of Money Wages

The Relationship between Unemployment and the ________ in the United Kingdom, 1861- 1957 "was published in* Economica* by A.W.

Sacrifice ratio

________: the number of percentage points of annual output lost in the process of reducing inflation by 1 percentage point.

Friedman and Phelps

________ introduced the* expected inflation* to the equation, which helped conclude that unemployment returned to its natural rate in the long run.

Volcker disinflation

The ________ said that inflation was reduced when budget deficits were expanding aggregate demand.

period of high unemployment

If a nation wants to reduce inflation, it has to go through a(n) ________ and low output.

Phillips curve

________: a curve that shows the short- run tradeoff between inflation and unemployment.