(a) Describe a simple fixed-price short-run macroeconomic model (with flexible nominal wages) and compare it with a...
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(a) Describe a simple fixed-price short-run macroeconomic model (with flexible nominal wages) and compare it with a conventional market-clearing model.
Compare their predictions for the effectiveness of monetary and fiscal policies.
(b) Describe a simple short-run macroeconomic model with flexible prices but fixed nominal wages and compare it with a conventional market-clearing model (with flexible nominal wages). Compare their predictions for the effectiveness of monetary and fiscal policies.
(c) Describe a simple short-run macroeconomic model with a fixed price and fixed nominal wages and compare it with a conventional market-clearing model. Compare their predictions for the effectiveness of monetary and fiscal policies.
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