1. Unemployment and Inflation

2. Unemployment and Inflation Inflation

3. Inflation rates for selected countries (average % per annum)

6. UK Inflation rates in selected industrial countries

7. UK Inflation rates in selected industrial countries

8. UK EU 15 Inflation rates in selected industrial countries

9. UK EU 15 Inflation rates in selected industrial countries

10. UK EU 15 USA Inflation rates in selected industrial countries

11. UK EU 15 USA Inflation rates in selected industrial countries

12. UK EU 15 Japan USA Inflation rates in selected industrial countries

13. UK EU 15 Japan USA Inflation rates in selected industrial countries

14. UK EU 15 Japan USA OECD Inflation rates in selected industrial countries

15. UK EU 15 Japan USA OECD Inflation rates in selected industrial countries

16. n The costs of inflation < redistribution < uncertainty < balance of payments < resources used to cope with inflation n The costs of inflation < redistribution < uncertainty < balance of payments < resources used to cope with inflation INFLATION

17. Demand-pull inflation O Price level National output AS AD 1 P1P1 Q1Q1

18. O Price level National output AS AD 1 P1P1 Q1Q1 AD 2 Demand-pull inflation

19. O Price level National output AS AD 1 P1P1 Q1Q1 AD 2 P2P2 Q2Q2 Demand-pull inflation

20. Cost-push inflation O Price level National output AS 1 AD P1P1 Q1Q1

21. O Price level National output AS 1 AD P1P1 Q1Q1 AS 2 Cost-push inflation

22. O Price level National output AS 1 AD P1P1 Q1Q1 AS 2 P2P2 Q2Q2 Cost-push inflation

23. The interaction of demand-pull and cost-push inflation O Price level National output AS 1 AD 1 P1P1

24. O Price level National output AS 1 AD 1 P1P1 AS 2 AD 2 P2P2 The interaction of demand-pull and cost-push inflation

25. O Price level National output AS 1 AD 1 P1P1 AD 2 P2P2 AS 3 AD 3 P3P3 The interaction of demand-pull and cost-push inflation AS 2

26. Unemployment and Inflation Relationship between Unemployment and Inflation

27. n Aggregate demand and inflation and unemployment < effects of increases in aggregate demand (relative to potential output) < how the objectives vary with the course of the business cycle n The Phillips curve < the original curve < the apparent policy implications n Aggregate demand and inflation and unemployment < effects of increases in aggregate demand (relative to potential output) < how the objectives vary with the course of the business cycle n The Phillips curve < the original curve < the apparent policy implications RELATIONSHIP BETWEEN INFLATION AND UNEMPLOYMENT

28. The original Phillips curve Unemployment (%) Wage inflation (%)

29. 0 Total tax revenue Average tax rate (%) 100 A Laffer curve

30. 0 Total tax revenue Average tax rate (%) 100 R max. t1t1 A Laffer curve