Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The problem with the Keynesian model
We can classify two problems with the Keynesian model as developed so far:
1. Π is exogenous. Although inflation may temporarily deviate from wage inflation, this deviation can't be too large and it can't last for too long (since real wages would become unreasonable low or unreasonable high). This model has no determination of Πw and hence no complete determination of Π. A model which predicts an inflation of around 6% by presuming a wage inflation of 6% isn't very useful. Keynesian model with inflation is hence incomplete.
2. It is quite unreasonable to presume that Πw would be independent of Y. More reasonable would be to model Π Was a positive function of Y. If we are in a boom, L would be above its average and unemployment below its average. In such a situation, it's reasonable to expect wage inflation to increase.
To solve these problems, we have to make Πw endogenous. We do this by Keynesian model adding the Phillips curve.
Discuss how decisions are made in your workgroup. Which model is used for what situation? Be sure to provide specific examples of at least three situations and what model was used
What advantages might a socialist system have in responding to the needs of people struck by an emergency situation like the earthquake that occurred in Haiti in January, 2010?
Derive that the complex amplitude of the double convex lens shown in the image below with focal length 1/f = (n-1 ) (1/R 1 - 1/R 2 ). Hint: we derived an plano convex lens in cla
Explain the difference between productive and allocative ( economic ) efficiency. Explanation of productive efficiency, e.g. output at AC minimum Define to the effect th
THE GOALS OF MACROECONOMIC POLICY Economic analysis attempts to explain why problems arise in the economy and how these problems can be dealt with. It is, therefore, indispens
The market demand for a factor The market demand curve for any input is not simply the horizontal summation of the individual demand curves of all the firms. This is due to th
Evaluate your workplace and identify a group that has "power" in the organization. Analyze why the group is considered powerful. a. What are the elements that contribute to the gro
i wan''t the answer of this Q Question 3 (5 marks) Most studies of firms’ long run costs have found that average costs decline as firms produce increasingly larger output levels (
TRADE IN SERVICES: India had objected to the inclusion of trade in services in the agreement for the UR negotiations. The Indian negotiations continued to raise object
Ask question difference between static multiplier and dyanamic multiplier
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd