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(Solved): Why do the unexpected inflation and output gap axes need to extend into the negative regions in th ...



Why do the unexpected inflation and output gap axes need to extend into the negative regions in the Phillips curve diagram?
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Why do the unexpected inflation and output gap axes need to extend into the negative regions in the Phillips curve diagram? Negative output gaps are very common. Both output gaps and unexpected inflation can be negative or positive. Negative inflation gaps are very common. Both output gaps and unexpected inflation always begin by being negative.


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