1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alex_Xolod [135]
3 years ago
8

In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price leve

l in the economy deviates from the expected price level. Several theories explain how this might happen.
For example, the sticky-wage theory asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100. If the actual price level turns out to be 110, the firm's output prices will___________ , and the wages the firm pays its workers will remain fixed at the contracted level. The firm will respond to the unexpected increase in the price level by_________ the quantity of output it supplies. If many firms face similarly rigid wage contracts, the unexpected increase in the price level causes the quantity of output supplied to ___________ above the natural level of output in the short run.
Business
1 answer:
timofeeve [1]3 years ago
5 0

Answer:

1.  Rise

2.  Increasing

3.  Rise

Explanation:

For example, the sticky-wage theory asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100. If the actual price level turns out to be 110, the firm's output prices will RISE, and the wages the firm pays its workers will remain fixed at the contracted level. The firm will respond to the unexpected increase in the price level by INCREASING the quantity of output it supplies. If many firms face similarly rigid wage contracts, the unexpected increase in the price level causes the quantity of output supplied to RISE above the natural level of output in the short run.

The above explanation is the reason why the aggregate supply curve slopes upward in the short run

You might be interested in
According to the Fisher Effect, the expected rate of inflation does not influence the:________.
Alekssandra [29.7K]

Answer:

ex ante real interest rate.

Explanation:

According to Fisher effect the expected inflation rate will affect indices like nominal interest rate, current prices of goods, and the demand for money.

However it does not affect the ex ante real interest rate.

The Fisher effect shows how real interest rate is related to nominal interest rate.

Real interest rate = Nominal interest rate - Expected inflation rate

Ex ante real interest rate is the anticipated real interest rate in the future.

This is not considered in the Fisher effect

6 0
2 years ago
Bell expects to produce 1 comma 800 units in January and 2 comma 155 units in February. The company budgets 3 pounds per unit of
Debora [2.8K]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Production:

January= 1,800 units

February= 2,155 units

The company budgets 3 pounds per unit of direct materials at a cost of $ 10 per pound.

Beginning inventory= 4,950 pounds.

Desired ending inventory= 20​% of the next​ month's direct materials needed for production.

Desired ending balance for February is 4,860 pounds.

To calculate purchases, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

<u>January (in pounds):</u>

Production= 1,800*3= 5,400

Desired ending inventory= (2,155*3)*0.2= 1,293

Beginning inventory= (4,950)

Total= 1,743

Total cost= 1,743*10= $17,430

<u>February (in pounds):</u>

Production= 2,155*3= 6,465

Desired ending inventory= 4,860

Beginning inventory= (1,293)

Total= 10,032

Total cost= 10,032*10= $100,320

3 0
3 years ago
In a free market setting where quantity supplied is 40 units and quantity demanded is 50 units, price will:
zvonat [6]

Answer: Increase

Explanation:

According to the Law of Supply and Demand, If the demand for the good is higher than the supply, the price will be higher to reflect the relative scarcity and if the demand is lower than supply, the price will be lower to reflect the relative excess.

In this case the quantity demanded is higher than the quantity supplied so the price will have to increase to reflect the relative scarcity of the good.

4 0
2 years ago
arren has a loan with an effective interest rate of 5 percent per annum. He makes payments at the end of each year for 10 years.
Bond [772]

Answer:

interest portion of fifth payment = $66.89 ≈ $67

Explanation:

effective interest rate = 5% yearly

first payment = $200

second payment = $210

third payment = $220

fourth payment = $230

fifth payment = $240

sixth payment = $250

seventh payment = $260

eighth payment = $270

ninth payment = $280

tenth = $290

using a financial calculator, I determined the present value (principal) of the loan = $1,860.87

then I prepared an amortization schedule:

interest portion of fifth payment = $66.89 ≈ $67

Download pdf
6 0
3 years ago
Zimmer-centerpulse is the world's largest producer of replacement hips and knees for orthopedic surgery. they are particularly i
mylen [45]

The correct answer is Demography

Zimmer-Centerpulse is the world’s largest producer of replacement hips and knees for orthopedic surgery. It is particularly interested in marketing in the southwestern United States, where a large aging population lives.

The demography most directly explains its continued growth.

8 0
3 years ago
Other questions:
  • On January 1, Year 1, Chaco Company sold $300,000 of 10% twenty-year bonds. Interest is payable semiannually on June 30 and Dece
    9·2 answers
  • Each business unit has marketing and other specialized activities (e.g., finance, manufacturing, or research and development) at
    6·2 answers
  • Office Supplies had a normal starting balance of $75. There were debit postings of $80 and credit postings of $60 during the mon
    14·2 answers
  • Assume that Canadian consumers increase their demand for Mexican financial assets How would the international supply of Canadian
    13·1 answer
  • Good salespeople:_______. A. Help customers buy.B. Are never the only link between the firm and its customers.C. Are not part of
    14·1 answer
  • Suppose banks keep no excess reserves and that all banks are currently meeting the reserve requirement. The Federal Reserve then
    11·1 answer
  • What is a special event that is for people outside a company, such as customers, potential customers, and the
    11·1 answer
  • for economics students: does anyone have an example of a demand and supply curve diagram for the labour force that is suitably l
    15·1 answer
  • A bilateral contract is one in which one side promises to perform in exchange for the other side's actions
    9·1 answer
  • The date on which the principal amount is repaid to the bondholder is known as the​ ________.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!