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!
The problem with the Keynesian model
We can classify two problems with the Keynesian model as developed so far:
1. Π is exogenous. Although inflation may temporarily deviate from wage inflation, this deviation can't be too large and it can't last for too long (since real wages would become unreasonable low or unreasonable high). This model has no determination of Πw and hence no complete determination of Π. A model which predicts an inflation of around 6% by presuming a wage inflation of 6% isn't very useful. Keynesian model with inflation is hence incomplete.
2. It is quite unreasonable to presume that Πw would be independent of Y. More reasonable would be to model Π Was a positive function of Y. If we are in a boom, L would be above its average and unemployment below its average. In such a situation, it's reasonable to expect wage inflation to increase.
To solve these problems, we have to make Πw endogenous. We do this by Keynesian model adding the Phillips curve.
Use the points on the graph below to answer the following questions. i) What is Ep along D1 (from A to B)? ii) What is the Ep along D2 (from X to Y)? iii) What are
what measures should be taken to raise the productivity of the workers?
Consider the following simple economy which consists of two industries, guns (1) and butter (2) and is characterized by the following input-output matrix. Suppose also that
Suppose that 70% of people who identify themselves as an "Independent" voter end up voting for a Republican candidate. What is the probability that out of 120 "independent" voters
illustrate and discuss the implications of various market structures (competitive and non-competitive)for price determination.
what cause keynesian unemployment?
Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturity. Next, plot the resulting yield c
You have been invited by world leaders to be part of a team of international economists selected to make recommendations on how the international community might work together more
Critically explain why interest rates are pro-cyclical, using the supply and demand for bonds framework.
For you and other Mexican farmer-ranchers rice is a substitute good for corn as basic food stuff for human consumption. If the market price for feed corn and rice were the same bef
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