Study Guides (247,954)
Canada (121,183)
Economics (462)
ECON 1BB3 (163)

lecture 27 ~ chapter 14.docx
Premium

2 Pages
86 Views
Unlock Document

Department
Economics
Course
ECON 1BB3
Professor
Hannah Holmes
Semester
Fall

Description
How does the economy return to long-run equilibrium after suffering a shock?  If the economy is not in long run equilibrium there is an automatic adjustment mechanism that begins to work through the labour markets  Eventually the economy will return to long run equilibrium, even without government intervention (through a shift in SRAS) Example 1: starting in a recession  If at point a  unemployment rate is high  there will be a downward pressure in wages (companys wont have to apy their workers as much)  people started to accept lower nominal wages  real wage is falling  labour s relatively cheap
More Less

Related notes for ECON 1BB3

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit