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Author Question: Moving along the AS curve, the real wage rate is constant while moving along the potential GDP line, ... (Read 117 times)

jon_i

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on: Jun 29, 2018
Moving along the AS curve, the real wage rate is constant while moving along the potential GDP line, the real wage rate changes. Explain whether the previous statement is correct or incorrect.
 
  What will be an ideal response?

Question 2

Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is 3?
 
  A) 600
  B) 725
  C) 1,000
  D) 1,120


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Sweetkitty24130

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

The statement is incorrect. It reverses the situation. Moving along the AS curve, the money wage rate is constant and so the real wage rate changes. Moving along the potential GDP line, money wage rates have adjusted to the change in the price level and so the real wage rate is constant.

Answer to Question 2

C


jon_i

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

vickyvicksss

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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