Homework Answers
Answer to the question -
The AS curve slopes upwards because, a. wages are sticky.
Explanation to the answer -
In the short run the aggregate supply curve is upward sloping. Economists explain this situation by offering some theories. Such as -
• Sticky-wage theory
• Sticky-price theory
• Misperception theory
According to the question, here the relevant theory is “ Sticky-wage theory".
As per this theory, in the short run, wages ( i.e. the payment of workers ) don't respond immediately or tends to have a slow response or takes time to adjust with the changes in the price level or performance.
As nominal wages are generally based on expected prices and fixed by the management by a prior contract . So, when the economy/price level changes, the wages can't be adjusted immediately. i.e. wages are sticky.
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of money rises
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of money falls
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of money falls
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A supply curve slopes upwards because a. the higher the price the higher the quantity that the sellers are willing to supply b. the higher the price the lower the quantity that the sellers are willing to supply c. an increase in price brings the quantity sold down to zero Od the quantity supplied in insensitive to price QUESTION 6 A firm experiencing constant economies of scale will have a long-run average cost curve that is:...
Question 5 Not yet answered Points out of 3.00 P Flag question The notion that sticky-wages impacts the short-run aggregate supply curve implies that when the price level is lower than expected, Select one: a. production is less profitable and employment rises. b. production is less profitable and employment falls. c. production is more profitable and employment falls. d. production is more profitable and employment rises.
1.)
Using the above figure, if the price level increases
the equilibrum interest rate rises and the equilibrium quantity
of money rises
the equilibrium interest rate rises and the equilibrium quantity
of money falls
the equilibrium interest rate rises and the equilibrium quantity
of money stays the same
the equilibrium interest rate falls and the equilibrium quantity
of money falls
the equilibrium interest rate falls and the equilibrium quantity
of money stays the same
2.)
The demand for money is...
8. IF Maria Escalera's disposable income increases from $600 to $650 and her level of personal- consumption expenditures increases from $480 to $520, you may conclude that her marginal propensity to (A) consume is 0.8. (B) consume is 0.4 (C) consume is 0.25. (D) save is 0.8. (E) save is 0.25. 9. Which effect describes the fact that when the price level increases, the interest rate increases and consumption decreases? (A) Interest rate effect (B) Net export effect (C) Pareto...
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