Medium Run
Describe and illustrate by using following graphs reaction of the economy on increase in government spending in short and in medium run
Lecture 3 - The Medium Run Labor Market - PowerPoint PaboTa C pucyHKaMu X Daw InaBHan BCTaBKa AnsanH nepexoAbl AHNMayNA CanA-Loy PeyeH3poBaHue BNA DopMat 4TO Bbl XOTUTe CAenaTb? KozybekoB AsaT AnbekoBN4 Go Bbipesatb Maker AARONHanpaBneHue TexCTa 3anuska ourypbi HanTu BB KonupoBath C6poCUTE BbIpoBHATb TekCT [ KOHTyp Qurypbl ac 3aMeHUTb BCTaBUTb Cospath DopMat no obpasuy X K 4 S abe AV - Aa. A . = = = = peo6pasoBaTb B SmartArt ynopaAOUNTb 3kcnpecc- chang - Pasgen 30pekTbl ourypbl BblenuTb * bydep 06MeHa CnanAbl Wpnot A63au PucoBaHue PeakTupoBaHue 1 . 12 . 1 . 11 . 1 . 10 . 1 . 9 . 1 . 8 . 1 . 7 1 . 6 . 1 . 1 . 4 . . 1 . 3 . 1 . 2 . 1 . 1 . . 0 1 . 1 . 1 . 2 . 1 . 3 1 . 4 . 5 . 1 . 6 . 1 . 7 . 1 . 8 . 1 . 9 . 1 . 1 . 11 . 1 . 12 . 23 The Natural Rate of Unemployment The Wage-Setting Relation Wages, Prices, and the Figure 6 - 6 Wages, Prices, and the 24 Natural Rate of 6-5 The Natural Rate of Unemployment . 2 . The Price-Setting Relation Unemployment The price-determination equation is: P - (1+ 4)W t we divide both sides by W. we got The natural rate of - (1+ 4) To state this equation in terms of the wage rate, wa invert both sides: unemployment is the Price-setting relation 1 1 Real wage, W/P The price-catting . 1 . 1 . I . 0 . unemployment rate such 1+ 4 . PS that the real wage chosen in 25 5-5 The Natural Rate of Unemployment 2 . Equilibrium Real Wages and Unemployment wage setting is equal to the jo-setting and the price unemployment rate, or natural rate of unemployment ur real wage implied by price . 4 . 1 . 3 . 1 setting. .) is called the natural rate of unemployment WS Wage-setting relation 6 . 1 . 5 . 1 . 26 5-5 The Natural Rate of Unemployment apter 6: The Medium Run Equilibrium Real Wages and Unemployment un he post ons of the wage setting and price depend on bothz and u. Unemployment rate, u At a given unemployment rate, higher unemployment unemployment rate is needed to bring the real wage -O- back to what firms are willing to pay. . 8 . 1 . 7 . By letting firms increase their prices given the wage, forcement of antitrust legislation leads to a decrease in the real wage. ChanA 23 N3 32 aHrnuncKun (CWA) 3aMeTKN npuMe4aHUA 19 88 -+ 150% O CO 9 w ] x ] P3 X L ~ () ENG 18:07 15.11.2019Principles of Macroeconomics 3rd edition.pdf - Adobe Reader Dawn PeakTupoBaHue npocMOTp OKHO CnpasKa 418 / 509 - + 125% - 9 MHCTPyMeHTbl noAnncaHNe K KOMMEHTapun 3aknaAku K D 8= W 7. Consumers, producers, and the efficiency of markets CHAPTER 19 AGGREGATE DEMAND AND AGGREGATE SUPPLY 433 W 8. Application: The costs of taxation J' 9. Application: International trade Figure 19-7 W 10. Measuring a nation's income Price W 11. Measuring the cost of living Level THE LONG-RUN EQUILIBRIUM. 12. Production and growth The long-run equilibrium of Long-run the economy is found where the W 13. Saving, investment, and the aggregate supply Short-run financial system aggregate-demand curve crosses aggregate the long-run aggregate-supply 14. Unemployment and its natural supply curve (point A). When the rate economy reaches this long-run 15. The monetary system Equilibrium 454 45454542845342545WHATTIME equilibrium, perceptions, wages, 16. Money growth and inflation price and prices will have adjusted so 17. Open-economy that the short-run aggregate- macroeconomics: Basic concepts supply curve crosses this 18. A macroeconomic theory of point as well. the open economy Aggregate 19. Aggregate demand and demand aggregate supply Natural rate Quantity of J 20. The influence of monetary and of output Output fiscal policy on aggregate demand W 21. The short-run tradeoff between inflation and unemployment W 22. Five debates over have fully adjusted to this long-run equilibrium. That is, when an economy is in its macroeconomic policy long-run equilibrium, perceptions, wages, and prices must have adjusted so that W Glossary the intersection of aggregate demand with short-run aggregate supply is the same as the intersection of aggregate demand with long-run aggregate supply. THE EFFECTS OF A SHIFT IN AGGREGATE DEMAND Suppose that for some reason a wave of pessimism suddenly overtakes the econ- omy. The cause might be a scandal in the White House, a crash in the stock market, or the outbreak of a war overseas. Because of this event, many people lose confi- dence in the future and alter their plans. Households cut back on their spending 18:15 x ] WI OV Ed EN 21.11.16