MAT223H5 Study Guide - Quiz Guide: Money Supply

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21 Aug 2019
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MAT223H5 Full Course Notes
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Example 3 (supply side shock): increase in oil prices i i20 i2 i1. Year 1, point a: all markets are in equilibrium (y1 = yn, u1 = un, pe. 2: higher natural rate of unemployment indicates new natural level of output: yn, negative shock to supply: leftward shift to the as curve (point b, mark yn. 2 where p1 (price of all other goods have remained unchanged when poil increases) intersects. 1, m2), called a: due to higher prices starting july, workers earn lower real wages from july to december, higher prices also decrease the real money stock, shifting lm to the left (point b) Dec 31st of year 1: workers" wage contracts expire, increase pe (from pe. 2: labor market not in equil, economy in sr equil. Year 20: workers set pe = p, which causes u20 = un.

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