Question

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 Nominal wage has decreased to $14.95 O Nominal wage has increased to $17.12 O Real wage has decreased to $14.95 O Real wage has increased to $17.12 QUESTION 4 A graph of the long-run aggregate supply curve is: O Downsloping while a graph of the short-run aggregate supply is upsloping o Upsloping while a graph of the short-run aggregate supply is downsloping o Vertical while a graph of the short-run aggregate supply is upsloping O Vertical while a graph of the short-run aggregate supply is downsloping Cliek Save and Submit to save and submit. Click Save All Answers to save all answers.

Number 2. If the price level increases to 107 then youur

Answer 1

Ans 1)

Option C is correct answer because in the long run wage contracts adjust efficiently as per the future expectations

Ans 2)

16/1.07=14.95

Hence when Price level was 100 Real Wage was 100 and after changing Price level to 107 real wage changes to 16/1.07=14.95

Real was has decreased to $14.95

Option C is correct

In the short run supply increases with the increase in output whereas in the long run shocks from aggregate demand are temporary and output remains constant
Hence Long run supply curve is vertical where short run supply curve is upward sloping

Option C is correct