3)If the price level rises and the money wage-rate remains constant, what happens to the quantity...
3)If the price level rises and the money wage-rate remains
constant, what happens to the quantity of
real GDP supplied? Along which aggregate supply curve does the
economy move? (Detail Answer)
Homework Answers
If the price level in the economy rises and the money wage remains the same then real wages are falling. at a lower money wage i.e. lower real wage the firm will employ more and more firms in the market. this will increase the amount of goods produced in the market,
THe economy will be moving along the SRAS curve. and this generally occurs when the Ad curve has shifted to the right.
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3)If the price level rises and the money wage-rate remains
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Q. If the money wage rate rises and potential GDP remains the same, does the LAS curve or the SAS curve shift or is ther...
Q. If the money wage rate rises and potential GDP remains the same, does the LAS curve or the SAS curve shift or is there a movement along the LAS curve or SAS curve? If potential GDP increases, what happens to aggregate supply? Does the LAS curve shift or is there a movement along the SAS curve?
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1. In addition to the price level, what does the aggregate demand and aggregate supply model...
1. In addition to the price level,
what does the aggregate demand and aggregate supply model focus
on?
a. real
GDP
b.
nominal GDP
c.
the real interest rate
d. stock
prices
2. Which statement best characterizes the long-run
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a. It is
horizontal.
b. It
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c.
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If at some specific interest rate the quantity of money demanded is less than the quantity...
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1. Explain what will happen to the price level real GDP and the unemployment rate in...
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If the money wage rate and other resource prices do not change when the price level...
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1. In addition to the price level,
what does the aggregate demand and aggregate supply model focus
on?
a. real
GDP
b.
nominal GDP
c.
the real interest rate
d. stock
prices
2. Which statement best characterizes the long-run
aggregate-supply curve?
a. It is
horizontal.
b. It
shows a positive relationship between price level and output.
c.
It demonstrates the importance of money in the economy....
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
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