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In: Economics

Assume your boss is an important policymaker/decision-maker, but might not understand the economics behind his/her decisions...

Assume your boss is an important policymaker/decision-maker, but might not understand the economics behind his/her decisions and policies. For each of the following, brief the decision-maker on what he/she needs to know about macroeconomics to make better decisions in the given situations. Use equations, graphs, and discussion.

Policy Topic: We have a recession. What do I need to know about “sticky wages?”

a. Explain the concept

b. Describe and analyze all of the theories cited about why wages might be “sticky.”

c. How do “sticky” wages play a large role in policy effectiveness?

d. How does this concept change the policy approaches of Keynesians and Classicalists?

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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