BU204_03_Johnson_Jennifer_Unit 6 Homework

BU204_03_Johnson_Jennifer_Unit 6 Homework - Jennifer...

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Jennifer Johnson Kaplan University BU204- 03 Macroeconomics Anthony Brogna Unit 6 November 22, 2010
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“Sticky” nominal wages “are slow to fall even in the face of high unemployment and slow to rise even in the face To me this means sticky wages mean that salaries do not fall in a recession, they just grow slower. For example, over the last year there were many news stories of companies reducing their workforce and laying off people by the thousands. However, there were hardly any news stories of dramatic across the board pay cuts. They simply keep the wages at the same rate. Long Run Aggregate Supply Curve “shows the relationship between the aggregate price level and the quantity of aggregate output supplied that would exist if all prices, including nominal wages, were fully flexible” After reading the information on the aggregate supply curve, I think that it depicts the quantity of real GDP that is supplied by the economy at different price levels. The reasoning used to construct the aggregate supply curve differs from the reasoning used to construct the
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This note was uploaded on 01/28/2011 for the course BU 204 taught by Professor Enricodigiammarinojr during the Spring '10 term at Kaplan University.

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BU204_03_Johnson_Jennifer_Unit 6 Homework - Jennifer...

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