ECON 101 Lecture Notes - Lecture 4: Profit Margin, Imperfect Competition, Post-Keynesian Economics
25 Sep 2016
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The new keynesian model of the trade cycle was an improvement on the simple. Sem 2 q6 nov 2004; sem 1 q6 apr 2005; sem 1 2008 q6; sem 2 2008 q6. Explain in detail why and how both money wages and prices were relatively inflexible or sticky downwards in the new-keynesian model of the trade cycle, using all relevant diagrams. Your answer should include all relevant assumptions that underpin and / or support this model of the business or trade cycle. In the new or post-keynesian model of the business or trade cycle, both the sras curve in the product market and the demand for labour curve in the labour market are distinctive in terms of their shapes. i. ii. Explain why these two curves take quite distinctive shapes in terms of wage and price rigidity or stickiness. Explain what occurs in this model when there is an unexpected decline in aggregate.
