Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 9, Problem 7QP
(a)
To determine
Estimate the labor market in recessionary gap.
(b)
To determine
Estimate the labor market in inflationary gap.
(c)
To determine
Estimate the labor market in long run equilibrium.
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Students have asked these similar questions
Identify the point or points for which the following is true: The economy is exhibiting inefficient production or unemployment
What industry sectors are most likely to add jobs during a down economy and an improving economy respectively?
Are there employment sectors that are essentially unaffected by economic fluctuations?
A. Within the frame of AD-AS, in which AS is normally
upward sloping, if there is a fall of resource prices, what
will happen to inflation and unemployment in the short
run? Show your result on a graph.
B. From your answer above, what will happen to real wage
(w/p)? What will be the adjustment
path?
Chapter 9 Solutions
Macroeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2STCh. 9.3 - Prob. 3STCh. 9 - Prob. 1QP
Ch. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 16QPCh. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - Prob. 3WNGCh. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNG
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- During a recession, couldn't firms reduce their labor costs by the same, or possibly more, if they laid off fewer workers while cutting wages? Why did few firms use this approach?arrow_forwardUsing the “Keynesian” labor market and the aggregate production function, explain what happens to the amount of output firms are willing to produce … If there is an increase in the price level. If there is a decrease in the price level.arrow_forwardWhat causes rates of unemployment in macroeconomics?arrow_forward
- What actions might a business owner take during times of economic contraction? In other words, how might the economic indicators directly impact their actions?arrow_forwardIf the economy goes into a recessionary gap, a) What will be the effect on the labor market? b) What will happen to wages in the long run? 3.arrow_forwardIn the short run, an increase in the unemployment rate is likely to be accompanied byarrow_forward
- When a recession hits, should the government take strong steps to get the economy going again and put the unemployed back to work?arrow_forwardWhat is likely to be the impact of efforts towards reducing unemployment on the production potential of the economy!arrow_forwardWhat is the relationship between the business cycle and economic growth, and how do government policies aim to manage economic fluctuations?A) The business cycle has no connection to economic growth, and government policies have no impact on fluctuations.B) The business cycle represents the periodic expansion and contraction of economic activity, and government policies, such as fiscal and monetary measures, aim to mitigate the negative effects of economic downturns and support long-term growth.C) The business cycle is solely influenced by consumer spending.D) Government policies only exacerbate economic fluctuations.arrow_forward
- Suppose that a country experiences a reduction in productivity – that is, an adverse shock to the production function.A) What happens to the labor demand curve? Show the change on the graph.B) How would this change in productivity affect the unemployment rate if the labor market is always in equilibrium?Explain your answer referring to the graph.arrow_forwardWhat is the condition of the U.S. economy now (phase of business cycle, GDP growth rate, unemployment rate, inflation rate)? What actions have the U.S. government taken? What are the impacts of these actions in an AD-AS framework?arrow_forwardSuppose that a country experiences a reduction in productivity--that is, an adverse shock to the production function. (This example should sound familiar!)a. What happens to the labor demand curve?b. How would this change in productivity affect the labor market--that is, employment, unemployment, and real wages--if the labor market was always in equilibrium?c. How would this change in productivity affect the labor market if unions prevented real wages from falling?arrow_forward
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