Multipliers and Economic Fluctuations - Equilibirum in the Short-Run with Multipliers and DWR - Equilibrium in the Medium-Run: Partial Recovery and Full Recovery
8 important questions on Multipliers and Economic Fluctuations - Equilibirum in the Short-Run with Multipliers and DWR - Equilibrium in the Medium-Run: Partial Recovery and Full Recovery
What are the recovery mechanisms?
(Right shift) due to --> Expansionary government policies
What are market forces? Examples...
- shift in physical and human capital (coming from bankrupt firms during the downturn)
- technological advances (expand activities)
- recuperation of banking systems (able again to finance activities)
What are expansionary government policies? Examples...
- When inflation raises output prices
- Use of fiscal policy (taxes and government spending)
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What is the market-clearing wage?
What are nominal wages?
The economy can only be at 3 places at a given time. What are the options?
2) Inflationary gap
3) Full employment
Why does an inflationary gap have low unemployment?
How can you indicate full employment on the Phillips curve?
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