In a small open economy, is a negative supply shock or a negative demand shock more damaging for medium-run output? Explain in words and use AD-EDU diagrams to back up your argument. Describe the effects on the real wage, unemployment and the real exchange rate in medium-run equilibrium of an increase in unemployment benefits.

In a small open economy, is a negative supply shock or a negative demand shock more damaging for medium-run output? Explain in words and use AD-EDU diagrams to back up your argument. Describe the effects on the real wage, unemployment and the real exchange rate in medium-run equilibrium of an increase in unemployment benefits.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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