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- a) Derive the slopes of Phillip’s curve (PC, thereafter) and the Monetary Rule (MR, henceforth) curve. What economic implication do you get from these slopes of these two curves?
b) Consider the utility loss function of the central bank; where it only cares about reducing the output gap. Now, due to the ongoing pandemic, economy is going through the recession along with the disinflation. In a graph consisting the utility loss function of CB, show how CB will accommodate the recession?
2 a) A fall in the unemployment benefit would reduce the intercept of both the labour supply and the wage-setting curve. In a graph with labour supply, WS and PS explain how this incident will affect the decision of the firms and the equilibrium unemployment? State why this happens. (Make sure to mention the axes and direction of the shifts of the curves)
where both the price level and money wage are assumed to be variable. Include in your
answer the effects on the level of real income, the price level, and the money wage.
AD < AS
AD >AS
Higher the MPC will be cause of higher national income?
True or False
Consider the any two crisis situation in the world (apart from 1930s crisis or 2008 crisis) where fiscal or monetary policy were used to great effect. Explain in detail with references using the IS − LM model. Also explain how such policies are being used in Covid times in India and America using the same model.
Which type of unemployment would increase if workers lost their jobs because of recession
#340153 on Dec 2023