Prices levels to: GDP to: Unemployment to:
Prices levels to: Go Up - Demand drives prices up. GDP to: Up - prices raised. Unemployment to: Down - employers need help to meet output demanded. I’m no economist, took 10 sec to take a stab.
Just going over my note cards, sorry it was so easy. Thought it might be a little thought provoking.
Price levels go up because (demand, supply relationship, ceteris paribus) GDP: go up in the short term, not sure about the long term though Unemployment: Goes down (The Philips curve could explain that)
amberpower Wrote: ------------------------------------------------------- > Just going over my note cards, sorry it was so > easy. Thought it might be a little thought > provoking. Don’t be sorry. I can’t use Qbank at work and rely on AF for thought provoking questions.
What if the agregate demand shrinks, unanticipated?
Opposite.
I thought we should cover all basis:)
And there are sooooo many bases to cover in econ!! Glad to see you stopped in Map.
Ok, so what would the Keynesian response be, for: AD up AD down
i hate econ questions where there are two economists and they attended xyz conference and made 2 statements and you have to decide who’s right and who’s wrong.
I have to say, I am not sure. They think wages are downward sticky, not sure where to go from there.
Keynesians believe government intervention is required to bring back the economy to an equilibrium state. This could be done through monetary and fiscal policies. At AD up, the government would: reduce money supply, increase discount rate At AD down, the government would: increase money supply, decrease discount rate
That is, at AD up, measures to reduce AD. At AD down, measures to stimulate AD.
Ooooh, sorry, I wasn’t sure what you were asking. I was so confused! Okay, that I do know! I am sure tired of AD down though, my MMKT used to make 4%.