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Author Question: Which of the following is a possible consequence if a contractionary monetary policy is adopted? ... (Read 54 times)

dbose

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on: Jun 30, 2018
Which of the following is a possible consequence if a contractionary monetary policy is adopted?
 
  A) The demand for labor will increase.
  B) The aggregate price level will rise.
  C) Real output will increase if nominal wages are fixed.
  D) Real wages will increase if nominal wages are fixed.

Question 2

In what sense is frictional unemployment good for the economy?
 
  What will be an ideal response?


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nikmaaacs

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Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

Since frictional unemployment is the unemployment that exists so that workers and firms find the right matches, the economy needs some frictional unemployment to operate efficiently.


dbose

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

mcabuhat

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Reply 3 on: Yesterday
:D TYSM

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