Question
1.a) What is the shape of the aggregate supply ( AS ) curve if The aggregate supply relation captures the effects of output on the
1.a) What is the shape of the aggregate supply (AS) curve if
The aggregate supply relation captures the effects of output on the price level. It is derived from equilibrium in the labour market.
(i) nominal wages and prices are flexible and competitively determined?
(5 marks)
(ii) nominal wages are downwardly rigid? (5 marks)
b)Is the AS curve apt to be more or less elastic with respect to the price level in the medium-run/long-run as opposed to the short-run? (10 marks)
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Accounting Principles A Business Perspective Financial Accounting Chapter 1-8
Authors: James Edwards, Roger Hermanson, Bill Buxton
1st Edition
1461088186, 978-1461088189
