Explain an important assumption behind the upward slope of the AS curve
Homework Answers
Friedman assumed wage determination based on unemployment and market power of the firm. He also did not believe in any money illusion. Therefore, wage and price in Friedman's model were sticky, and short-run AS curve was steep and upward sloping.
This was the reason that monetarists believed that money supply is useful for the short run but Keynes did not believe that the money supply could affect the output.
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Explain an important assumption behind the upward slope of the
AS curve
Does industry supply curve slope upward in the long run? explain.
Does industry supply curve slope upward in the long run? explain.
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Why is the short-run Phillips curve downward sloping? Explain the reasons behind the downward slope of the short-run Phillips curve.
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Exercise 4. The slope of the AS curve. a) Why does the AS curve slope upward?...
Exercise 4. The slope of the AS curve. a) Why does the AS curve slope upward? b) If the AS curve were more steeply sloped, how would the economy respond differently to aggregate demand shocks (shocks to a)? aggregate supply shocks (shocks to 5)? sloped? c) If the curve were more steeply sloped, how would the economy respond differently to d) What kind of economic changes in the economy would lead the curve to be more steeply
Sticky wages cause the: Multiple Choice long-run aggregate supply curve to slope upward. short-run aggregate supply...
Sticky wages cause the: Multiple Choice long-run aggregate supply curve to slope upward. short-run aggregate supply curve to slope downward. long-run aggregate supply curve to slope downward. short-run aggregate supply curve to slope upward.
In mainstream macroeconomics (neoclassical theory) the upward sloping supply curve rest on the assumption that factors...
In mainstream macroeconomics (neoclassical theory) the upward sloping supply curve rest on the assumption that factors of productions are “scarce”. How should the supply curve be drawn if we assume that factors of productions are not scarce (the stock of capital and labor are not fully utilized and employed)? Horizontal or V ertical?
In the liquidity-preference model, the slope of the money supply curve is: horizontal, reflecting the assumption...
In the liquidity-preference model, the slope of the money supply curve is: horizontal, reflecting the assumption that the Bank of Canada does not completely control the supply of money. horizontal, reflecting the assumption that the Bank of Canada completely controls the supply of money vertical, reflecting the assumption that the Bank of Canada does not completely control the supply of money vertical, reflecting the assumption that the Bank of Canada completely controls the supply of money This assumption is: O...
Question 13 4 pts If the slope of the AS curve were lower (curve flatter), •...
Question 13 4 pts If the slope of the AS curve were lower (curve flatter), • Would the immediate response of output to an aggregate demand shock (shock to a) be stronger or weaker? Explain the intuition behind each answer.
Why does the short-run aggregate supply curve slope upward? O A. Profits rise when the prices...
Why does the short-run aggregate supply curve slope upward? O A. Profits rise when the prices of the goods and services firms sell rise more rapidly than the prices they pay for inputs. O B. An increase in market prices results in an increase in quantities supplied, as stated by the law of supply. O C. As the number of workers, machinery, and equipment increase, and technological changes occurs, quantity supplied increases. O D. All of the above cause the...
Exercise 4. The slope of the AS curve. a) Why does the AS curve slope upward? b) If the AS curve were more steeply sloped, how would the economy respond differently to aggregate demand shocks (shocks to a)? aggregate supply shocks (shocks to 5)? sloped? c) If the curve were more steeply sloped, how would the economy respond differently to d) What kind of economic changes in the economy would lead the curve to be more steeply
Sticky wages cause the: Multiple Choice long-run aggregate supply curve to slope upward. short-run aggregate supply curve to slope downward. long-run aggregate supply curve to slope downward. short-run aggregate supply curve to slope upward.
In the liquidity-preference model, the slope of the money supply curve is: horizontal, reflecting the assumption that the Bank of Canada does not completely control the supply of money. horizontal, reflecting the assumption that the Bank of Canada completely controls the supply of money vertical, reflecting the assumption that the Bank of Canada does not completely control the supply of money vertical, reflecting the assumption that the Bank of Canada completely controls the supply of money This assumption is: O...
Question 13 4 pts If the slope of the AS curve were lower (curve flatter), • Would the immediate response of output to an aggregate demand shock (shock to a) be stronger or weaker? Explain the intuition behind each answer.
Why does the short-run aggregate supply curve slope upward? O A. Profits rise when the prices of the goods and services firms sell rise more rapidly than the prices they pay for inputs. O B. An increase in market prices results in an increase in quantities supplied, as stated by the law of supply. O C. As the number of workers, machinery, and equipment increase, and technological changes occurs, quantity supplied increases. O D. All of the above cause the...
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