Define real shocks, define nominal shocks, and give an example of each
What will be an ideal response?
Real shocks are changes that disturb labor market equilibrium or goods market equilibrium. Nominal shocks are changes that disturb the asset market. A change in aggregate saving is an example of a real shock. A change in the money supply is an example of a nominal shock.
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All of the following are true for the leader firm in a Stackelberg oligopoly with a linear demand and marginal cost except which one?
A) The leader earns more profit than the follower second firm. B) The leader earns more profit than if it operated in a Chamberlin oligopoly. C) The leader has first-mover advantage. D) The leader takes the follower second firm's best-response production into consideration when determining its output level.
An increase in the level of immigration into a nation would cause the:
A. long-run aggregate supply curve to shift to the right. B. long-run aggregate supply curve to shift to the left. C. short-run aggregate supply curve to shift to the left. D. long-run aggregate supply to remain fixed.
An advantage of settling disputes via arbitration rather than court cases is that:
a. the risk of an incorrect decision in the former case is negligible. b. the former is inexpensive and binding. c. the former is more likely to grant a lenient decision. d. the former may be more knowledgeable than an uninformed jury.
The flat region of the aggregate supply curve reflects the Keynesian belief that:
a. both inflation and unemployment does not exist. b. high growth rate of money supply poses problems in the economy. c. unemployment is usually experienced amidst high real GDP. d. government intervention in the economy aggravates the problems of inflation and unemployment. e. inflation is not a problem when unemployment is high.