When will an increase in aggregate demand not result in lower unemployment rates in the short run?
What will be an ideal response?
An increase in aggregate demand will not result in lower unemployment rates in the short run if there is no change in the level of output relative to potential GDP as a result of the increase in aggregate demand. If, for example, aggregate supply increases and potential GDP increases at the same time that aggregate demand is increasing, the unemployment rate (and inflation) may remain unchanged.
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If the price is $60 per unit, what is the break even amount of units for technology B?
a. 50 b. 60 c. 70 d. None-They would have to shut down
If firms are paying efficiency wages, they:
A. may be reluctant to increase nominal wages when aggregate demand increases. B. are highly vulnerable to import competition. C. may be targeted for takeover by firms paying market wages. D. may be reluctant to cut wages when aggregate demand declines.