11.Explain negative cost-push inflation and give an example of a possible cause.
12.Assume the economy is operating in the vertical range of the AS curve and the government increases spending. Explain how Fed accommodation can trigger further increases in the price level.
13.Graphically illustrate an increase in the labor supply curve and explain its impact on the equilibrium wage rate and quantities. On a separate graph, illustrate an increase in the labor demand curve and explain its impact on the equilibrium wage rate and quantities.
In the following figure, the demand for labor has increased as illustrated by the rightward shift in the demand curve from Dto D1. This results in an increase in the equilibrium wage rate to W1and additional quantities demanded and supplied to L114.Using a labor supply and demand curve demonstrate the effect of a decline in the demand for labor assuming wages are "sticky" in a downward direction.If wages "stick" at Worather than fall to the new equilibrium then there will be unemployment equalto L0- L1.0.
15.Explain efficiency wage theory.
16.Explain the relative-wage explanation of unemployment.
17.Explain what the Phillips curve represents.
18.How do changes in expectations cause the Phillips Curve to be unstable?