According to New Keynesians, why can firms increase output in the short run in response to higher prices?
What will be an ideal response?
In the new Keynesian view, in the short run many input costs are fixed, so firms can expand output without experiencing an increase in input cost that is proportional to the increase in the prices of their products.
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If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve
A) decreases; upward B) increases; upward C) decreases; downward D) increases; downward
One likely result of monopoly power is
a. a wide variety of substitute products from which consumers can choose b. an elimination of barriers to industry entry c. a decline in government regulation d. a higher price than would exist in a competitive industry e. an improvement in allocative efficiency
Suppose the market for nursing services in a local community is so dominated by a single community hospital that for all practical purposes it is considered a monopsony. Using the diagram below, answer the question. If the market were perfectly competitive instead of dominated by a monopsonist, what would the equilibrium wage and level of employment be?
a. W2 and E0 b. W0 and E2 c. W1 and E1 d. W0 and E1 e. W0 and E0
Public goods can be provided publicly
Indicate whether the statement is true or false.