Classical economists used the demand and supply model to explain the real wage rate, employment and...

Classical economists used the demand and supply model to explain the real wage rate, employment and unemployment. Explain how the classical economist reached the conclusion that the labor market self corrects, and, therefore, involuntary unemployment must be a consequence of rigidities with respect to nominal price (changes in the price goods) shocks or real wage rigidities. Use graph(s) to facilitate your analysis.

Expert Solution

Rahul Sunny answered 1 year ago

Explain the differences between the simple Keynesian (demand-side) model and the classical (supply side) model with...

Explain the differences between the simple Keynesian (demand-side) model and the classical (supply side) model with respect to fiscal policy, what can change Y (Real GDP), and any other things that you think are relevant. To answer this question correctly, you would need to: A) Explain why fiscal policy does not change the Yd curve in the classical model but does in the simple Keynesian model. B) Explain that in the classical model Y only changes if Ys changes. C)...

Labor Demand Data Labor Supply Data Employment Total Product Product Price Employment Wage Rate 0 0...

Labor Demand Data Labor Supply Data Employment Total Product Product Price Employment Wage Rate 0 0 $2.20 0 -- 1 15 2.00 1 $1.00 2 28 1.80 2 2.00 3 39 1.60 3 3.00 4 48 1.40 4 4.00 5 55 1.20 5 5.00 6 60 1.00 6 6.00 The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing selling price of the product? Multiple Choice $1.40. $1.60. $1.80....

Explain in details the supply and demand model .

Explain the employment and wage rate for a monopsony in an unorganized labor market graphically. Explain...

Explain the employment and wage rate for a monopsony in an unorganized labor market graphically. Explain graphically how the wage rate and employment level change when a union is established in this market.

The aggregate demand/aggregate supply model is used to understand short-run fluctuations in real GDP (i.e. the...

The aggregate demand/aggregate supply model is used to understand short-run fluctuations in real GDP (i.e. the business cycle). According to the aggregate demand/aggregate supply model, what are some of the things that can cause a recession? Also, discuss the relationship between the business cycle and the unemployment rate?

Explain what economists mean by full employment and why this rate of unemployment is not zero....

Explain what economists mean by full employment and why this rate of unemployment is not zero. 50 words minimum

With regard to the demand and supply of labor, explain the concept of the equilibrium wage

2) When the real wage is above the level that equilibrates supply and demand: Select one:...

2) When the real wage is above the level that equilibrates supply and demand: Select one: a. It creates a deadweight loss in the labor market. b. the quantity of labor demanded exceeds the quantity supplied. c. GDP definitely rises. d. Interest rate rises. 3) If Central Bank A cares only about keeping the price level stable and Central Bank B cares only about keeping output at its natural level, then in response to an exogenous increase in the price...

Using the aggregate demand and aggregate supply model, explain the effects of the following on price and real income in Malaysia.

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Classical economists believed that the economy will have full employment and any deviations from the full...

Classical economists believed that the economy will have full employment and any deviations from the full employment will be temporaryExplain in detall. Use theoretical reasoning and diagrammatic representation liberally to support your answers . ( 15 nts)

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