phillips curve and possible production curve? (1 Viewer)

[school4nerds]

i dont get both of these curves, could some one explain?

i get the phillips curve with the inflation as the cost of lower unemployment etc, but not when they add another curve/ have those vertical lines

 

[kwu1]

i dont get both of these curves, could some one explain?

i get the phillips curve with the inflation as the cost of lower unemployment etc, but not when they add another curve/ have those vertical lines

R u referring to the augmented Phillips curve for the long run trade off?

 

[freeeeee]

K, the philips curve is a inversely proportional relationship between inflation and unemployment. Really self-explanatory as inflation is caused by economic growth (demand-pull inflation) and during times of high economic growth their is low unemployment.

The possible production curve is a curve that measures comparative advantage (which i believe is not in the 2013 syllabus anymore), Kind of self-explanatory --> if an economy dedicates all its factors of production into producing one good e.g. bread it will produce no shirts etc and where the curve cuts the x and y axis is the relationship e.g. bread is on y axis and shirt on x axis
The curve cuts the y axis at 300 and x axis at 600 (just an example)
That means an economy can produce 300 tonnes of bread or 600 tonnes of shirts (the units can be substituted for kg etc, just an example).
so for every tonne of bread 2 tonnes of shirts can be produced, so that economy has comparative advantage in making shirts.

This is a preliminary course thing, you dont need to know this btw...