Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
In the short run, the discrepancy between actual and expected price level causes changes in output and employment. But in the long run, if all other things remain constant, the higher price level will come to be accurately expected by firms, narrowing down the difference between expected and actual price levels. This is important because in the long run, the costs incurred by business firms rise as economic agents react to higher prices. Wage earners, for example, now pay more for the same basket of goods and services they used to purchase earlier. A hike in wage rates will be bargained for and the same will be reflected in higher prices by the suppliers of goods and services.
As we have seen, the higher level of output in the short run was possible only because the unanticipated rise in the price level led to higher profits to business firms. As soon as the costs increase in line with final prices, the incentive to produce higher levels of output disappears and the production reverts to its original level. In this situation, the level of output will be at its natural rate and deviations from this state are possible only when actual price level differs from the expected price level in the short run. Thus, in the long run, the natural rate of output is the equilibrium rate of output for the economy. As shown in figure 6.5 the short run aggregate supply curve is given by ASS and ASL is the long run aggregate supply curve. The level of output is given by Q which is the natural rate of output.
Macroeconomic performance The UK's future macroeconomic performance must be judged on how average living standards improve, inflation is kept under control, economy grows and
What is the difference between an economic luxury and an economic necessity? Ans) An economic luxury is wasting land on pools huge garden, etc. An economic requirement is what y
REVEALED PREFERENCE APPROACH The downward slope of the demand curve was justified on the basis of utility derived by the consumer. But specification of consumer tastes in form
HOW CAN A COUNTRY MAINTAIN EQUILIBRIUM GDP IN AFOREIGN TRADE?
Suppose that a household in a two-period model has income of $30,000 in period 1 and $25,000 in period 2, and the interest rate is 75 percent. Assume that the price of the good is
The monetary system in any economy facilitates trade and allows people to trade more efficiently, as compared to a barter economy. In the United States, the monetary authority is t
"International bodies such as the aced argue that more unequal income and wealth distribution erode social cohesion and increase the scope for internal conflict."
For this question you will use the dataset "march01.dat", which includes wages (column 1), age (column 2), a dummy variable indicating females (column 3), and years of education (c
Question 1: "Motivation denotes to the degree of readiness of an organism to pursue some designated goal and implies the evaluation of the nature and locus of the forces, inclu
Estimate the cost of expanding a planned new clinic by 20,000ft^2. The appropriate capacity exponent is 0.66, and the budget estimate for 200,000ft^2 was $15 million.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd