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Video Follow-up: Macro 3.7-LR Adjustments

Posljednje ažuriranje over 1 year ago

5

Instrukcije

Pick 1, Answer the 5 questions!

Question 1

01:19

1

Question 2

03:14

1

Question 3

04:56

1

Question 4

06:03

1

Question 5

06:35

1

Pitanje 1

1.

Sort the following based on time frame.

Price Level changes by the same amount of nominal wages and resource costs
Flexible (Nominal) Wages
Price Level changes faster or more than nominal wages and resource costs
Flexible Resource Prices
Sticky Resource Prices
Sticky (Nominal) Wages

Short Run
Long Run

Pitanje 2

2.

At long-run equilibrium, the natural rate of unemployment is equal to the current rate of unemployment.

Tačno

Netačno

Pitanje 3

3.

Drugi mogući odgovor:

SRAS

Left

AD

LRAS

Right

Pitanje 4

4.

Sequence the LR-Adjustment from LR to SR back to LR.

Consumer confidence increases.
We have demand pull inflation and a positive output gap.
Due to higher prices, workers demand higher nominal wages.
AD shifts right
SRAS shifts left.
In the SR, nominal wages are sticky, but firms will agree to higher nominal wages in the LR.
The economy is back to full employment with a higher PL and RGDP that is stabilized back at its full employment position.
The economy starts in LR-Equilibrium.

Pitanje 5

5.

Sequence the LR-Adjustment from LR to SR back to LR.

Oil prices rise.
The economy starts in LR-Equilibrium.
We now have cost-push inflation, or a stagflation.
The economy will be back at long-run position with no change in PL or RGDP.
SRAS will now shift right.
SRAS shifts left.
Nominal wages are sticky in the SR, but flexible in the LR. As such, firms will pay lower nominal wages in the LR.
Due to lower RGDP, unemployment fears grow and workers are willing to accept lower nominal wages.