Homework Answers
a) Keynesian theory of sticky wages primarily applies to "Decrease" in the price level during a "recession".
b) As a result of the sticky wage salaries paid to workers do not fall at the same rate as decreases in price level. the answer is "D".
c) "A"
Sticky wages lead to the firms in the market cutting output and laying off workers.
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Keynesian theory of sticky wages primarily applies to in the price level during As a result...
Aggregate Demand AS IT Price Level LAD2 i I AD 10 Real GDP 1. Circle the...
Aggregate Demand AS IT Price Level LAD2 i I AD 10 Real GDP 1. Circle the correct answer: Based on the graph, the (flatter, steeper) aggregate supply curve results in a higher inflation and thus a (smaller, larger) multiplier effect. 2. Is this question true or false? If the aggregate supply curve is vertical, the multiplier will approach infinity. C False True What do you notice about the relationship between the real wage and the price level? Check all that...
Student Full Name 12. (Post) Keynesian theory of the firm: the unit direct costs (UDC) are...
Student Full Name 12. (Post) Keynesian theory of the firm: the unit direct costs (UDC) are normally a) increasing b) decreasing with respect to the level of production because firms usually operate constant c below the level of full capacity 13. In the (Post) Keynesian markup pricing (Price (1 + markup) UDC), prices are: b) market-based and demand-determined a) administered by firms and cost-determined 14. Inflation rate CPI,-CPI, a) CPI Nominal Wages c) Cost of market basket in a given...
Suppose expected wages decrease at each price level. As a result, _____________, and __________. Group of...
Suppose expected wages decrease at each price level. As a result, _____________, and __________. Group of answer choices AD decreases; AD shift rightward SRAS increases; AD stay the same SRAS decreases; AD stay the same AD decreases; AD shift leftward
2 Student Full Name: 12 (Post) Keynesian theory of the firm: the unit direct costs (UDC)...
2 Student Full Name: 12 (Post) Keynesian theory of the firm: the unit direct costs (UDC) are normally a) increasing b) constant c) decreasing with respect to the level of production because firms usually operate below the level of full capacity 13. In the (Post) Keynesian markup pricing (Price = (1 + markup ) UDC), prices are: b) market-based and demand-determined a) administered by firms and cost-determined 14. Inflation rate: Nominal Wages c) Cost of market basket in a given...
Help please I am so confused 1. Assume that nominal wages are sticky and that firms...
Help please I am so confused
1. Assume that nominal wages are sticky and that firms determine the level of employment in the short run. Use an AD/AS diagram to model the goods market, a labor demand/supply diagram to model the labor market, and the loanable funds diagram to model the financial market. Assume that in addition to the real interest, consumption depends on current disposable income and the present value of future disposable income. Speculate what would happen in...
1. Which of the following is not a property of the aggregate demand curve? It shows...
1. Which of the following is not a property of the aggregate demand curve? It shows the relationship between the overall price level and level consumption. It shows the price level on the vertical axis and output on the horizontal axis. The aggregate demand curve slopes downward. It shows the relationship between the overall price level and the level of total demand. 2. When the price level increases people: feel more wealthy. have the same real value of assets, regardless...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output and price level decrease. Output and price level increase. Output decreases and the price level increases. 2. In the equation of exchange, the term P × Q is the same as: the money supply. nominal GDP. national income. real GDP. 3. Expansionary monetary policy shifts the _____ curve to the _____. AD; right SRAS; left SRAS; right AD; left 4. The Taylor rule suggests...
3. The short-run and long-run supply response to a change in the price level The following...
3. The short-run and long-run supply response to a change in the price level The following graph represents the aggregate supply (AS) curve based on an expected price level of 150. The economy's potential GDP level is $9 trillion. Major unions across the country have recently negotiated three-year wage contracts with employers. The wage contracts are based on an expected price level of 150, but the actual price level turns out to be 200. Show the short-run effect of the...
According to Keynesian theory, the most important determinant of saving and consumption is Select one: a....
According to Keynesian theory, the most important determinant of saving and consumption is Select one: a. the level of real income. b. the stock of liquid assets. c. the stock of durable goods in the consumer's possession. d. the level of consumer indebtedness. Question 5 Not yet answered Marked out of 1.00 Flag question Question text In the Keynesian model, planned investment is inversely related to Select one: a. the interest rate. b. the level of income. c. the wage...
Help with graph, fill in the blanks and drop downs.Drop Downs:1. more/less2. higher/lower...
Help with graph, fill in the blanks and drop downs.Drop Downs:1. more/less2. higher/lower3. (short-run change in output):no change/decrease/increase4. (long-run change in price level):same/lower/higher than/as initial expectations5. (long-run change in output):no change/decrease/increase4. The rational expectations model Suppose the U.S. economy is in equilibrium at a potential output of $10 trillion so that unemployment is at the natural rate. At the beginning of the year, the Federal Reserve announces that its monetary policy will aim to maintain output at potential output and sustain...
Aggregate Demand AS IT Price Level LAD2 i I AD 10 Real GDP 1. Circle the correct answer: Based on the graph, the (flatter, steeper) aggregate supply curve results in a higher inflation and thus a (smaller, larger) multiplier effect. 2. Is this question true or false? If the aggregate supply curve is vertical, the multiplier will approach infinity. C False True What do you notice about the relationship between the real wage and the price level? Check all that...
Student Full Name 12. (Post) Keynesian theory of the firm: the unit direct costs (UDC) are normally a) increasing b) decreasing with respect to the level of production because firms usually operate constant c below the level of full capacity 13. In the (Post) Keynesian markup pricing (Price (1 + markup) UDC), prices are: b) market-based and demand-determined a) administered by firms and cost-determined 14. Inflation rate CPI,-CPI, a) CPI Nominal Wages c) Cost of market basket in a given...
2 Student Full Name: 12 (Post) Keynesian theory of the firm: the unit direct costs (UDC) are normally a) increasing b) constant c) decreasing with respect to the level of production because firms usually operate below the level of full capacity 13. In the (Post) Keynesian markup pricing (Price = (1 + markup ) UDC), prices are: b) market-based and demand-determined a) administered by firms and cost-determined 14. Inflation rate: Nominal Wages c) Cost of market basket in a given...
Help please I am so confused
1. Assume that nominal wages are sticky and that firms determine the level of employment in the short run. Use an AD/AS diagram to model the goods market, a labor demand/supply diagram to model the labor market, and the loanable funds diagram to model the financial market. Assume that in addition to the real interest, consumption depends on current disposable income and the present value of future disposable income. Speculate what would happen in...
3. The short-run and long-run supply response to a change in the price level The following graph represents the aggregate supply (AS) curve based on an expected price level of 150. The economy's potential GDP level is $9 trillion. Major unions across the country have recently negotiated three-year wage contracts with employers. The wage contracts are based on an expected price level of 150, but the actual price level turns out to be 200. Show the short-run effect of the...
Help with graph, fill in the blanks and drop downs.Drop Downs:1. more/less2. higher/lower3. (short-run change in output):no change/decrease/increase4. (long-run change in price level):same/lower/higher than/as initial expectations5. (long-run change in output):no change/decrease/increase4. The rational expectations model Suppose the U.S. economy is in equilibrium at a potential output of $10 trillion so that unemployment is at the natural rate. At the beginning of the year, the Federal Reserve announces that its monetary policy will aim to maintain output at potential output and sustain...
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