21Chp22-Econ3310

21Chp22-Econ3310 - Aggregate Supply Equilibrium Analysis...

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Unformatted text preview: Aggregate Supply Equilibrium Analysis Activists vs. non-activists. New-keynesian vs. New-classical The speed of adjustment depends on the degree of price/wage stickiness, and economists disagree. Wages and prices are flexible Less need for government intervention Rapid adjustment Wages are inflexible, particularly downward Need for active government policy Regardless of where output is initially, it returns eventually to the natural rate! Slow adjustment Self-Correcting Mechanism Aggregate Demand ...
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This note was uploaded on 02/14/2012 for the course ECON 3310 taught by Professor Dix during the Fall '08 term at York University.

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