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How can we define the real wage as nominal wage We define real wage as nominal wage divided by a price index (typically CPI). In the illustration above, your real wage was 20 i
Describe how price level evolves over time Using the time series we can study how price level evolves over time. If all prices rose by 2% during one month, price level would ri
Business Cycles Economic growth is not a continuous process. Superimposed on the long-term trends are short-term fluctuations in the levels of economic activity and\or in grow
who are cheap money;gainers and losers
George has been selling 5,000 T-shirts per month for $8.50. When he increased the price t0 $9.50 he sold only 4,000 T-shirts. What is the demand elasticity? If his marginal cost is
Which of the following is a reason why the aggregate demand curve slopes downward? a. At a higher price level, fewer goods and services are available. b. Periods when the price lev
Challenges to the American Labor Force
Q. Explain function of AS-AD model? The function of AS-AD model is to extend IS-LM model so that we can analyze situations where Y > Y OPT . To achieve this, we should make P e
Q. Definition of Money? Before talking over macroeconomic models we should define what we mean by money. Money has aninteresting and long history and an understanding of how we
Aggregate demand in the cross model Because C and Im depends positively on Y while G, I and X are exogenous, aggregate demand Y D will depend positively on Y: Y D (Y) = C(
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