Suppose the economy is in long-run equilibrium and the government decreases its expenditures. Which of the following helps explain the logic of why the economy moves back to long-run equilibrium?
a. as people revise their price-level expectations upward, firms and workers strike bargains for higher nominal wages.
b. as people revise their price-level expectations upward, firms and workers strike bargains for lower nominal wages.
c. as people revise their price-level expectations downward, firms and workers strike bargains for higher nominal wages.
d. as people revise their price-level expectations downward, firms and workers strike bargains for lower nominal wages.
d
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The expected return on dollar deposits in terms of foreign currency can be written as the ________ of the interest rate on dollar deposits and the expected appreciation of the dollar
A) product B) ratio C) sum D) difference
Unemployment is referred to as a lagging indicator because
A) it tends to stay high for many months after output stops declining during a recession. B) reports on unemployment statistics tend to lag behind reports on inflation statistics. C) it takes time to collect information regarding unemployed individuals.. D) it indicates economic activities from the year before.