In a CLOSED economy, with FIXED nominal wages, will contractionary monetary policies make the workers better...
In a CLOSED economy, with FIXED nominal wages, will contractionary monetary policies make the workers better off by increasing real wage?
Homework Answers
Answer : Yes, contractionary monetary policy increase the real wage rate for fixed nominal wages in closed economy. Because contractionary monetary policy decrease the money supply in the economy. If money supply decrease then people get less money on their hand to spend. This decrease the aggregate demand in the economy. As a result, the price level fall. Now if nominal wage rate is fixed then by that fixed nominal wage income workers can purchase more goods and services with lower price level. This increase the real wage rate for workers. As a result, workers become better off. Therefore, the given statement is true.
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In a CLOSED economy, with FIXED nominal wages, will
contractionary monetary policies make the workers better...
Consider a closed economy described by a Keynesian model with labour contract and nominal wage rigidity...
Consider a closed economy described by a Keynesian model with labour contract and nominal wage rigidity . The economy is originally in a general equilibrium. Let's now consider an unexpected monetary expansion. Please simply answer what happen to employment (N) and the real interest rate (r) in the short-run equilibrium, and what happen to price (P) in the long run.
Show short-term and long-term equilibrium for an economy that experiences a combination of both contractionary monetary...
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Number 2. If the price level increases to 107 then youur s Question Completion Status The economy enters the long-run once: O Nominal wages become real wages o Real wages become nominal wages suff...
Number 2. If the price level increases to 107 then
youur
s Question Completion Status The economy enters the long-run once: O Nominal wages become real wages o Real wages become nominal wages sufficient time has elapsed for wage contracts to expire and nominal wage to adj O Sufficient time has elapsed for real GDP to increase and unemployment to decrea QUESTION 3 Assume that initially your nominal wage was $16 an hour and the price index was 100 O...
2. (1,75 p.) Consider a closed economy with fixed prices and wages. Suppose the consumption function...
2. (1,75 p.) Consider a closed economy with fixed prices and wages. Suppose the consumption function takes the form C-400 +0.2(Y-T), the invest function is I- 170-10i. Central Bank sets interest rates that results in the following LM curve i-0.02Y-10. Initially G T-100. Suppose that govemment controls both fiscal and monetary policy. The government wishes to increase output by 10% but to keep the budget in balance and investment unchanged. Describe in detail the combination of policies (specify the instruments...
During a recession, economists traditionally focus on monetary and fiscal policies to bolster the economy. a. Use t...
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An open market sale is considered to be an example of because it A. contractionary monetary...
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4. Which of the following statements about minimum wages is true? a) Minimum wage laws may make some workers bet...
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Thanks for helping, I’ll make sure to give you a feedback :) The concept of "wages"...
Thanks for helping, I’ll make sure to give you a feedback
:)
The concept of "wages" does not include which of the following items? 19 Mutiple Choice direct money payments, like salaries and commissions bonuses and royaties earned money spent by workers ringe benefits, lke health insurance and paid leawe The real wage will rise if the nominal wage 20 Multiple Choice 011448 fals more rapidly than the prices of the goods and services buys ncreases at the same rate...
Number 2. If the price level increases to 107 then
youur
s Question Completion Status The economy enters the long-run once: O Nominal wages become real wages o Real wages become nominal wages sufficient time has elapsed for wage contracts to expire and nominal wage to adj O Sufficient time has elapsed for real GDP to increase and unemployment to decrea QUESTION 3 Assume that initially your nominal wage was $16 an hour and the price index was 100 O...
2. (1,75 p.) Consider a closed economy with fixed prices and wages. Suppose the consumption function takes the form C-400 +0.2(Y-T), the invest function is I- 170-10i. Central Bank sets interest rates that results in the following LM curve i-0.02Y-10. Initially G T-100. Suppose that govemment controls both fiscal and monetary policy. The government wishes to increase output by 10% but to keep the budget in balance and investment unchanged. Describe in detail the combination of policies (specify the instruments...
During a recession, economists traditionally focus on monetary and fiscal policies to bolster the economy. a. Use the aggregate demand - aggregate supply (AD-AS) model in Panel A to show the effect of a tax cut, in the form of a tax rebate, given to each taxpayer. If inflation is high during a recession, some economists advocate cuts on marginal tax rates, to help avoid additional inflation. b. Use the AD-AS model in Panel B to show the effect of...
An open market sale is considered to be an example of because it A. contractionary monetary policy; shifts the aggregate demand curve to the left, decreasing real GDP B. contractionary fiscal policy, shifts the aggregate demand curve to the left, decreasing real GDP C. expansionary monetary policy, shifts the aggregate demand curve to the right increasing real GDP D.expansionary fiscal policy, shifts the aggregate demand curve to the right, increasing real GDP QUESTION 7 Carter is a 1980s-styled stockbroker. He...
4. Which of the following statements about minimum wages is true? a) Minimum wage laws may make some workers better off and others worse off. b) Minimum wage laws make employers worse off. c) Both a) and b) are true. d) None of the above are true. 5. Consider diagram below, which illustrates the market for low-skilled labour. Suppose that the equilibrium quantity is reduced from Q1 to Q2 units, through the introduction of a price floor. Which of the...
Thanks for helping, I’ll make sure to give you a feedback
:)
The concept of "wages" does not include which of the following items? 19 Mutiple Choice direct money payments, like salaries and commissions bonuses and royaties earned money spent by workers ringe benefits, lke health insurance and paid leawe The real wage will rise if the nominal wage 20 Multiple Choice 011448 fals more rapidly than the prices of the goods and services buys ncreases at the same rate...
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