Oil and Gasoline prices plunged into a violent bear market (oil fell -75%) in Nov 2014 after OPEC decided not to cut production. The most prominent feature of the the US Economy in the 1970s was: The most prominent feature of the US Economy in the 1980s was: A) shifts upward if expected inflation increases, The Philli[s curve analysis described in Chapter 14 implies that there is a negative relationship between inflation and unemployment in, The trade-off between inflation and unemployment does not exist in the long run because people will adjust their expectations so that expected inflation, Analysis of the short-run Phillips curve suggests that policymakers who want to reduce unemployment in the short run should _____ aggregate demand at a cost of generating _____ inflation, Each of the following phenomena hinders the precise estimation of the natural rate of unemployment except, D) introduction of new products such as DVD players, Economists are able to estimate the natural rate of unemployment in the United States, B) in a 95 percent confidence interval of 2 to 3 percentage points, D) percentage of a year's real gross Domestic product that must be foregone to reduce inflation by 1 percentage point, The percentage of a year's real GDP that must be foregone to reduce inflation by 1 percentage point is called the, Assume that the sacrifice ration for an economy is 4, An economy must sacrifice 12 percent of GDP to reduce inflation, D) reduce output by 12 percent for 1 year, The assumption of rational expectations for inflation means that people will form their expectations of inflation by, A) optimally using all available information, including information about current policies, to forecast the future, The rational-expectations point of view , in the most extreme case, holds that if policymakers. What does it mean to say that money is neutral ?Explain how the money multiplier works. There is a lot of misunderstanding about the IPO process and the desired result. Most products and services will respond to … 1. 4. b. The mean of a probability distribution is the long-run arithmetic average value of a random variable having that distribution. D. how long it takes for fixed inputs to become variable. The conventional “wisdom” is that a successful IPO means … Keynes wrote The General Theory of Employment, Interest, and Money in the 1930s, and his influence among academics and policymakers increased through the 1960s. More than 30 million students study with Quizlet each month because it’s the leading education and flashcard app, that makes studying languages, history, vocabulary and science simple and effective. The FDIC offers some much-needed protection for deposit banking consumers. What Is the FDIC and What Does It Mean to Me? To measure the average consumer’s cost of living, government agencies conduct household surveys to identify a basket of commonly purchased items and then track the cost of purchasing this basket over time. costs firms face in changing prices sticky wages and prices: a situation where wages and prices do not fall in response to a decrease in demand, or do not rise in response to an increase in demand It could be of the following types: Downward rigidity or sticky downward means that there is resistance to the prices adjusting downward. Wages are thought to be sticky on both the upside and downside. According to the sticky price theory, the primary reason for sticky prices is what we c… All of the following are ways that the modern Phillips curve differs from the relationship observed by A. W. Phillips in 1958 except that the modern Phillips curve: A) Substitutes the output gap for unemployment, The classical dichotomy breaks down for a Phillips curve, which shows the relationship between a nominal variable, ______, and a real variable, ________, Based on the Phillips curve, unexpected movements in inflation are related to ___________, and based on the short-run aggregate supply curve, unexpected movements in the price level are related to, non-accelerating inflation rate of unemployment, When adaptive expectations are used to model inflation expectations in the Phillips curve, then the natural rate of unemployment is called the ______ rate of unemployment, If the equations for a country's Phillips curve is = 0.02 -0.8 (u-0.05). Create your own flashcards and study sets or choose from millions created by other students — it’s up to you. Bryan and Meyer (2010) separate the consumer market basket into “flexible” and “sticky” prices. It follows from the definition just stated that prices perform an economic function of major The sticky wage theory is an economic hypothesis theorizing that the pay of employed workers tends to have a slow response to the changes in the performance of a company or of the broader economy. Firms therefore do not adjust the wages and prices but instead may adjust the quality and quantity or volume of the given product. Prices are the amount charged for a good or service. Question: What Does It Mean For Prices To Be "sticky"? The basic aggregate demand supply equation implies that output exceeds natural output when the price level is, Some firms do not instantly adjust the prices they charge in response to changes in demand for all of the following reasons except, C) prices do not adjust when there is perfect competition, D) some firms announce their prices in advance, and some firms set their prices in accord with observed prices and output, According to the sticky-price model, other things being equal, the greater the proportion, s, of firms that follow the sticky-price rule, the ___ the ___ in output in response to an unexpected price increase, Each of the two models of short-run aggregate supply is based on some market imperfection. Of goods and services supplied Successful IPO means your Stock price Goes down price:! To … Changing prices in oligopoly tend to be `` sticky '' means... Of great importance in the expected value of ( denoted ( ).... 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