Consider the labour market represented in the following graph: real wage positive output gap K W P equilibrium employment high employment WS PS Employment rate Where WS represents the Wage Setting relationship, and PS represents the Price Setting relationship. Select ALL the CORRECT statements: The positive output gap may generate deflationary pressure in this economy. The Central Bank may decrease interest rate to restore equilibrium in the economy. At point E in this economy, actual prices are equal to expected prices. When the economy moves from point E to point X, actual unemployment may be below its equilibrium level.
Consider the labour market represented in the following graph: real wage positive output gap K W P equilibrium employment high employment WS PS Employment rate Where WS represents the Wage Setting relationship, and PS represents the Price Setting relationship. Select ALL the CORRECT statements: The positive output gap may generate deflationary pressure in this economy. The Central Bank may decrease interest rate to restore equilibrium in the economy. At point E in this economy, actual prices are equal to expected prices. When the economy moves from point E to point X, actual unemployment may be below its equilibrium level.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter21: Unemployment
Section: Chapter Questions
Problem 11RQ: If you an? out of school but working part time, are you considered employed or unemployed in U.S....
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![Consider the labour market represented in the following graph:
مجرا
real wage
W
P
equilibrium
employment
WS
positive output gap
PS
high
employment
Employment rate
Where WS represents the Wage Setting relationship, and PS represents the Price Setting relationship. Select ALL the CORRECT statements:
The positive output gap may generate deflationary pressure in this economy.
The Central Bank may decrease interest rate to restore equilibrium in the economy.
At point E in this economy, actual prices are equal to expected prices.
When the economy moves from point E to point X, actual unemployment may be below its equilibrium level.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d94b61e-9088-4b29-bb35-c4fc8a801d78%2F3bc4a849-3154-4b30-a27e-1041458e98c4%2Ftzgzpi_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the labour market represented in the following graph:
مجرا
real wage
W
P
equilibrium
employment
WS
positive output gap
PS
high
employment
Employment rate
Where WS represents the Wage Setting relationship, and PS represents the Price Setting relationship. Select ALL the CORRECT statements:
The positive output gap may generate deflationary pressure in this economy.
The Central Bank may decrease interest rate to restore equilibrium in the economy.
At point E in this economy, actual prices are equal to expected prices.
When the economy moves from point E to point X, actual unemployment may be below its equilibrium level.
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