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Refer to the diagram that shows an ADIAS model fora hypothetical economy The economy begins in long-run equilibrium at point
24.2 Question 24 (Algo) Question Help Refer to the diagram that shows an ADIAS model for a hypothetical economy The economy b
Suppose Canadas economy is in a long-run equilibrium with real GDP equal to potential output. Now suppose there is a decreas
The Phillips curve describes the relationship between O A. the rate of change of wages and inflation B. the money supply and
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24.2 Question 20 (Static) Question Help The adjustment asymmetry would imply that wages adjust A. slowly during slumps but qu
24.1 Question 16 (Static) Question Help Which of the following is a defining characteristic of the adjustment process that ta
24.1 Question 15 (Static) Question Help Which of the following is a defining characteristic of the short-run macroeconomic mo
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Answer #1

1. option A is correct.

In the long run wage adjustment process is such that the equilibrium at point A will be restored.

2. Inflationary gap because the real GDP > potential GDP.

of 800 - 700 = 100 units.

3.Option A is correct.

In the short run, the SRAS curve will shift out to the right. as the input price has reduced. but in the long run, due to wage adjustment process, the initial equilibrium will be restored.

4. Option E is correct.

There is an inverse relation between unemployment and the rate of change in wages (inflation).

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