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... ↑p1 ↓D2 (and so does ↓D1 ) therefore this gives incentives to the monopolist to ↓p2 Note: If there is strong complementarity between the two goods the monopolist sells, it may be optimal for the monopolist to sell one of the goods, say good 1, below its marginal cost in order to increase the demand ...
... ↑p1 ↓D2 (and so does ↓D1 ) therefore this gives incentives to the monopolist to ↓p2 Note: If there is strong complementarity between the two goods the monopolist sells, it may be optimal for the monopolist to sell one of the goods, say good 1, below its marginal cost in order to increase the demand ...
The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy,
... The major part of research in macroeconomics has traditionally emphasized aggregate disturbances as sources of aggregate changes.1 Exceptions to this approach were Long and Plosser (1983), and Horvath (1998, 2000) who posited that because of input-output linkages, productivity disturbances at the le ...
... The major part of research in macroeconomics has traditionally emphasized aggregate disturbances as sources of aggregate changes.1 Exceptions to this approach were Long and Plosser (1983), and Horvath (1998, 2000) who posited that because of input-output linkages, productivity disturbances at the le ...
2.4 Multiproduct Monopoly
... ↑p1 ⇒↓D2 (and so does ↓D1 ) therefore this gives incentives to the monopolist to ↓p2 Note: If there is strong complementarity between the two goods the monopolist sells, it may be optimal for the monopolist to sell one of the goods, say good 1, below its marginal cost in order to increase the demand ...
... ↑p1 ⇒↓D2 (and so does ↓D1 ) therefore this gives incentives to the monopolist to ↓p2 Note: If there is strong complementarity between the two goods the monopolist sells, it may be optimal for the monopolist to sell one of the goods, say good 1, below its marginal cost in order to increase the demand ...
Slide 1
... aggregate price level since 1949. What happened to the deflation? The basic answer is that since World War II economic fluctuations have taken place around a long-run inflationary trend. Before the war, it was common for prices to fall during recessions, but since then negative demand shocks have be ...
... aggregate price level since 1949. What happened to the deflation? The basic answer is that since World War II economic fluctuations have taken place around a long-run inflationary trend. Before the war, it was common for prices to fall during recessions, but since then negative demand shocks have be ...
CHAPTER 13 | Aggregate Demand and Aggregate Supply Analysis
... Net exports (NX) Using Y for real GDP, then we can write the following: Y = C + I + G + NX. The aggregate demand curve is downward sloping because a decrease in the price level increases the quantity of real GDP demanded. We assume that government purchases do not change as the price level changes. ...
... Net exports (NX) Using Y for real GDP, then we can write the following: Y = C + I + G + NX. The aggregate demand curve is downward sloping because a decrease in the price level increases the quantity of real GDP demanded. We assume that government purchases do not change as the price level changes. ...
Chapter 6
... 6.2 Value, Price, and Consumer Surplus 1) Marginal benefit is the benefit that a person receives from consuming A) a good or service until the person has grown tired of it. B) only goods and services that are free. C) one more unit of a good or service. D) all of the possible units of a good or serv ...
... 6.2 Value, Price, and Consumer Surplus 1) Marginal benefit is the benefit that a person receives from consuming A) a good or service until the person has grown tired of it. B) only goods and services that are free. C) one more unit of a good or service. D) all of the possible units of a good or serv ...
Consumer and Producer Surplus
... willingness to pay. This step forms the top of a rectangle, with $30—the price she actually pays for a book—forming the bottom. The area of Anne’s rectangle, ($59 − $30) × 1 = $29, is her consumer surplus from purchasing a book at $30. So the individual consumer surplus Anne gains is the area of the ...
... willingness to pay. This step forms the top of a rectangle, with $30—the price she actually pays for a book—forming the bottom. The area of Anne’s rectangle, ($59 − $30) × 1 = $29, is her consumer surplus from purchasing a book at $30. So the individual consumer surplus Anne gains is the area of the ...
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... (2012) by calibrating the model for respectively the Great Inflation and Great Moderation regimes and performing a series of counterfactual exercises. Consistent with the stylized facts, our model predicts a high degree of wage indexation for the Great Inflation, characterized by very volatile - in ...
... (2012) by calibrating the model for respectively the Great Inflation and Great Moderation regimes and performing a series of counterfactual exercises. Consistent with the stylized facts, our model predicts a high degree of wage indexation for the Great Inflation, characterized by very volatile - in ...
On the Desirability of Nominal GDP Targeting
... (2000), we find that output gap targeting does well, producing very small welfare losses that come close to implementing the flexible price and wage allocation. Nominal GDP targeting does almost as well as gap targeting. It is associated with smaller welfare losses than a conventionally parameterize ...
... (2000), we find that output gap targeting does well, producing very small welfare losses that come close to implementing the flexible price and wage allocation. Nominal GDP targeting does almost as well as gap targeting. It is associated with smaller welfare losses than a conventionally parameterize ...
Solution
... a. Draw typical aggregate demand and short-run aggregate supply curves. Label the horizontal axis “Real GDP” and the vertical axis “Aggregate price level.” Label the equilibrium point E1, the equilibrium quantity Y1, and equilibrium price P1. b. Data taken from the Department of Energy indicate that ...
... a. Draw typical aggregate demand and short-run aggregate supply curves. Label the horizontal axis “Real GDP” and the vertical axis “Aggregate price level.” Label the equilibrium point E1, the equilibrium quantity Y1, and equilibrium price P1. b. Data taken from the Department of Energy indicate that ...
Unpaid Work and the Economy: Linkages and Their Implications
... not yet recognized as important work that should be covered under economic policies. In addition, unpaid work is repetitive (i.e., performed daily), boring, and frequently a drudgery.8 Unpaid workers do not enjoy any upward mobility or promotions, and therefore these are deadend jobs. There is no re ...
... not yet recognized as important work that should be covered under economic policies. In addition, unpaid work is repetitive (i.e., performed daily), boring, and frequently a drudgery.8 Unpaid workers do not enjoy any upward mobility or promotions, and therefore these are deadend jobs. There is no re ...
Inflation Targeting with a backward Bending Phillips Curve
... with macro models that have a single aggregate labor market, and instead requires adoption of multi-sector labor markets. This gave the Friedman – Phelps approach a strategic advantage since it was compatible with single good – single labor market macro models that macroeconomists are familiar with ...
... with macro models that have a single aggregate labor market, and instead requires adoption of multi-sector labor markets. This gave the Friedman – Phelps approach a strategic advantage since it was compatible with single good – single labor market macro models that macroeconomists are familiar with ...
Wage-led or Profit-led Supply: Wages, Productivity and
... This darker side of the miracle is not widely recognized in the Netherlands itself. For example, in line with the consensus view, Dutch unions, in clear defiance of standard insider-outsider models, were happy to give priority to creating jobs for the unemployed over obtaining higher wages for the a ...
... This darker side of the miracle is not widely recognized in the Netherlands itself. For example, in line with the consensus view, Dutch unions, in clear defiance of standard insider-outsider models, were happy to give priority to creating jobs for the unemployed over obtaining higher wages for the a ...
Aggregate Demand and Aggregate Supply Analysis
... United States. Some products that are produced by U.S. firms, such as the Ford Mustang, have about 35 percent of their parts from countries other than the United States or Canada. Contrast that with the Toyota Sienna, which is built in Princeton, Indiana and has about 90 percent of its contents from ...
... United States. Some products that are produced by U.S. firms, such as the Ford Mustang, have about 35 percent of their parts from countries other than the United States or Canada. Contrast that with the Toyota Sienna, which is built in Princeton, Indiana and has about 90 percent of its contents from ...
Alternative Methods of Estimating Potential Output and
... The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. ...
... The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. ...
The Aggregate
... Firms may confuse changes in P with changes in the relative price of the products they sell. ...
... Firms may confuse changes in P with changes in the relative price of the products they sell. ...
Local Risk, Local Factors, and Asset Prices∗
... wage growth (within industry or occupation) to aggregate shocks is higher in MSAs with high local beta. Similarly, we …nd more pro-cyclical house prices, commercial real estate prices, and rents in MSAs with high local beta, re‡ecting a more cyclical demand for real estate in these areas. These …nd ...
... wage growth (within industry or occupation) to aggregate shocks is higher in MSAs with high local beta. Similarly, we …nd more pro-cyclical house prices, commercial real estate prices, and rents in MSAs with high local beta, re‡ecting a more cyclical demand for real estate in these areas. These …nd ...
Principles of Economics Third Edition by Fred Gottheil
... • If the price of a good falls: • MU/P rises. • The rational consumer will increase her consumption of that good. • Increase in quantity demanded (movement ...
... • If the price of a good falls: • MU/P rises. • The rational consumer will increase her consumption of that good. • Increase in quantity demanded (movement ...
These sample questions are based on the textbook
... If society is initially at point C , it must sacrifice 6 units of bread to obtain one more unit of tractors. If society produces 2 units of tractors and 12 units of bread, it is not using its available resources with maximum efficiency. ...
... If society is initially at point C , it must sacrifice 6 units of bread to obtain one more unit of tractors. If society produces 2 units of tractors and 12 units of bread, it is not using its available resources with maximum efficiency. ...
What is Marginal Utility? - Choose your book for Principles of
... • If the price of a good falls: • MU/P rises. • The rational consumer will increase her consumption of that good. • Increase in quantity demanded (movement ...
... • If the price of a good falls: • MU/P rises. • The rational consumer will increase her consumption of that good. • Increase in quantity demanded (movement ...
Fei–Ranis model of economic growth
The Fei–Ranis model of economic growth is a dualism model in developmental economics or welfare economics that has been developed by John C. H. Fei and Gustav Ranis and can be understood as an extension of the Lewis model. It is also known as the Surplus Labor model. It recognizes the presence of a dual economy comprising both the modern and the primitive sector and takes the economic situation of unemployment and underemployment of resources into account, unlike many other growth models that consider underdeveloped countries to be homogenous in nature. According to this theory, the primitive sector consists of the existing agricultural sector in the economy, and the modern sector is the rapidly emerging but small industrial sector. Both the sectors co-exist in the economy, wherein lies the crux of the development problem. Development can be brought about only by a complete shift in the focal point of progress from the agricultural to the industrial economy, such that there is augmentation of industrial output. This is done by transfer of labor from the agricultural sector to the industrial one, showing that underdeveloped countries do not suffer from constraints of labor supply. At the same time, growth in the agricultural sector must not be negligible and its output should be sufficient to support the whole economy with food and raw materials. Like in the Harrod–Domar model, saving and investment become the driving forces when it comes to economic development of underdeveloped countries.