a) Nominal wages are slow to adjust to changing economic conditions. Discuss the implication of this stickiness of wage for short run aggregate supply curve with relevant example. b) Using circular-flow diagram, explain why an economy’s income must equal its expenditure.
a) Nominal wages are slow to adjust to changing economic conditions. Discuss the implication of this stickiness of wage for short run aggregate supply curve with relevant example. b) Using circular-flow diagram, explain why an economy’s income must equal its expenditure.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter23: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 1QR
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a) Nominal wages are slow to adjust to changing economic conditions. Discuss the implication of this stickiness of wage for short run aggregate supply curve with relevant example.
b) Using circular-flow diagram, explain why an economy’s income must equal its expenditure.
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