Question

explain the concept of phillips curve? whether the curve exits in case of pakistan how do expectations of inflation effects phillips curve
answer should be off University (aiou)
800-600 words​

Answer 1

Explanation:

The simplified AD/AS model that we have used so far is fully consistent with Keynes’s original model. More recent research, though, has indicated that in the real world, an aggregate supply curve is more curved than the right angle used in this chapter. Rather, the real-world AS curve is very flat at levels of output far below potential (“the Keynesian zone”), very steep at levels of output above potential (“the neoclassical zone”) and curved in between (“the intermediate zone”). This is illustrated in Figure 1. The typical aggregate supply curve leads to the concept of the Phillips curve.