ECON 102 Lecture Notes - Lecture 14: Consumption Function, Fiscal Policy, Proportional Tax
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ECON 102 Full Course Notes
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Sometimes it helps to model production with a sticky price sras, sometimes with a sticky wage sras. If we"re directly using the keynesian cross, we typically need to use the sticky price assumption. Since the assumptions of sticky wage sras are less restrictive, they are more likely to apply, and we"ll typically draw the sticky wage sras in class. Anything that shifts per-unit profitability or expected profitability, given prices. Put ad and sras together to determine short run macroeconomic equilibrium. If sr quantity supplied > aggregate quantity demanded, aggregate p falls to sell it off. At every instant in time, the state of the economy is always described as inter. Need to develop the model a bit further. Long run aggregate supply curve (lras) - relationship between aggregate prices and output when prices can fully adjust to any change in the economy.