Why is the long-run aggregate supply curve vertical

Reference no: EM131298825

1. Why is the long-run aggregate supply curve vertical?

2. How does strong economic growth in China affect aggregate demand in the United States?

3. Consider two economies, both in recession. In the first economy, all workers have longterm contracts that guarantee high wages for the next five years. In the second economy, all workers have annual contracts that are indexed to changes in the price level (that is, their wages change immediately if there is inflation or deflation). Which economy will return to full-employment output first? Explain your response.

Reference no: EM131298825

Questions Cloud

The group meets every morning : Group C has been meeting for two months and seems to be progressing extremely well. You observe that the group meets every morning and spends the first five minutes chatting.

What type of justice involves the imposition of penalties : What type of justice involves the imposition of penalties? Which of the following is NOT one of the "universal human rights" espoused by the United Nations?

Identify the goal of financial management : Discuss the basic types of financial management decisions and the role of the financial manager. Identify the goal of financial management

What are the four parts of a business cycle : What are at least three factors that shift the short-run aggregate supply curve? What about the long-run aggregate supply curve?

Why is the long-run aggregate supply curve vertical : Consider two economies, both in recession. In the first economy, all workers have longterm contracts that guarantee high wages for the next five years.

What does the capm suggest for investors : What does the CAPM suggest for investors? What value does it hold for Corporate Financial Management, as opposed to investors in individual financial assets (like stocks and bonds)? What does market efficiency suggest about CAPM or vice versa

What are the effects of this change in the short run : Suppose that a sudden decrease in aggregate demand moves the economy from its long-run equilibrium.

Compare and contrast essays promote critical thinking : Discuss the type of system, capabilities, structure,limitations, payload, support equipment, and users.- List what is the same and what is different.

How credit crisis adversely affected mortgage companies : Contagion Effects of Credit Crisis: Explain how the credit crisis adversely affected many other people beyond homeowners and mortgage companies

User Account

All Pages