You have data for real output y, price level P, and the nominal wage W at two distant dates (time t = 0 and time t = 10) for three different economies: United Kingdom Date Price level t = 0 t = 10 Output y = 200 y = 190 P = 10 P = 10 Wage W = 50 W = 40 France Output y = 250 y = 250 Price level P = 15 P = 15 Wage W = 45 W = 45 Date t = 0 t = 10 Germany Date Output y = 220 y = 240 Price level t = 0 t = 10 P = 12 P = 12 Wage W = 40 W = 35 All these observations reflect potential equilibrium levels: each of the three economies was in a first potential equilibrium at time t= 0 and and is in a new potential equilibrium at time t = 10. You do not have any short-run data. wwww (3.B) Between time t= 0 and time t = 10, one of the three economies experienced a shock on productivity and a monetary intervention (a change in money supply). Can you identify this economy? Motivate your answer and try to speculate on a plausible reason for the monetary intervention.
You have data for real output y, price level P, and the nominal wage W at two distant dates (time t = 0 and time t = 10) for three different economies: United Kingdom Date Price level t = 0 t = 10 Output y = 200 y = 190 P = 10 P = 10 Wage W = 50 W = 40 France Output y = 250 y = 250 Price level P = 15 P = 15 Wage W = 45 W = 45 Date t = 0 t = 10 Germany Date Output y = 220 y = 240 Price level t = 0 t = 10 P = 12 P = 12 Wage W = 40 W = 35 All these observations reflect potential equilibrium levels: each of the three economies was in a first potential equilibrium at time t= 0 and and is in a new potential equilibrium at time t = 10. You do not have any short-run data. wwww (3.B) Between time t= 0 and time t = 10, one of the three economies experienced a shock on productivity and a monetary intervention (a change in money supply). Can you identify this economy? Motivate your answer and try to speculate on a plausible reason for the monetary intervention.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![You have data for real output y, price level P, and the nominal wage W at two distant
dates (time t = 0 and time t = 10) for three different economies:
United Kingdom
Price level
Output
y = 200
y = 190
Wage
W = 50
W = 40
Date
t = 0
t = 10
P = 10
P = 10
France
Date
t = 0
t = 10
Output
y = 250
y = 250
Price level
P = 15
P = 15
Wage
W = 45
W = 45
Germany
Output
y = 220
y = 240
Price level
P = 12
P = 12
Date
t = 0
t = 10
Wage
W = 40
W = 35
All these observations reflect potential equilibrium levels: each of the
three economies was in a first potential equilibrium at time t = 0 and and
is in a new potential equilibrium at time t =
short-run data.
10. You do not have any
(3.B)
Between time t= 0 and time t = 10, one of the three economies
experienced a shock on productivity and a monetary intervention (a
change in money supply). Can you identify this economy? Motivate
your answer and try to speculate on a plausible reason for the monetary
intervention.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4add683a-b7f7-4eb2-9ccd-ba51ac12c93a%2F60f04685-1d32-4ab6-a717-236c80261c22%2Ffn73rv_processed.png&w=3840&q=75)
Transcribed Image Text:You have data for real output y, price level P, and the nominal wage W at two distant
dates (time t = 0 and time t = 10) for three different economies:
United Kingdom
Price level
Output
y = 200
y = 190
Wage
W = 50
W = 40
Date
t = 0
t = 10
P = 10
P = 10
France
Date
t = 0
t = 10
Output
y = 250
y = 250
Price level
P = 15
P = 15
Wage
W = 45
W = 45
Germany
Output
y = 220
y = 240
Price level
P = 12
P = 12
Date
t = 0
t = 10
Wage
W = 40
W = 35
All these observations reflect potential equilibrium levels: each of the
three economies was in a first potential equilibrium at time t = 0 and and
is in a new potential equilibrium at time t =
short-run data.
10. You do not have any
(3.B)
Between time t= 0 and time t = 10, one of the three economies
experienced a shock on productivity and a monetary intervention (a
change in money supply). Can you identify this economy? Motivate
your answer and try to speculate on a plausible reason for the monetary
intervention.
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