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Author Question: If the money wage rate rises and potential GDP remains the same, does the LAS curve or the SAS curve ... (Read 63 times)

bclement10

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on: Jun 29, 2018
If the money wage rate rises and potential GDP remains the same, does the LAS curve or the SAS curve shift or is there a movement along the LAS curve or the SAS curve?
 
  What will be an ideal response?

Question 2

With regard to transition economies what is meant by shock therapy?
 
  What will be an ideal response?


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uniquea123

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Reply #1 on: Jun 29, 2018
Answer to Question 1

If the money wage rate rises and potential GDP remains the same there is a decrease in short-run aggregate supply and no change in long-run aggregate supply. The SAS curve shifts leftward and the LAS curve is unchanged.

Answer to Question 2

Shock therapy is an approach to transition from socialism to market capitalism that advocates rapid deregulation of prices, liberalization of trade, and privatization.


bclement10

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Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review

bbburns21

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Reply 3 on: Yesterday
:D TYSM

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