Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Medium Run

Describe and illustrate by using following graphs reaction of the economy on increase in government spending in short and in medium run

image text in transcribedimage text in transcribed
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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Morality Of Economic Behaviour Economics As Ethics

Authors: Vangelis Chiotis

1st Edition

1351168878, 9781351168878

More Books

Students also viewed these Economics questions