Latin for "holding other things constant". Meaning that when we change one variable, we assume all other variables are the same as they were.
Supply is the quantity of a good or service that producers are willing and able to supply onto the market at any given price in a given time period.
Price levels are falling; inflation is negative.
Explain why 'Sticky Wages' means the Keynesian AS curve has an Elastic section.
-Sticky wages mean firms can't adjust wages downwards, even when there is a fall in AD.
-A fall in AD will make many workers unemployed (at Y2).
-Because wages are still high, the firms can't afford to hire back the unemployed workers.
-Therefore: these workers stay unemployed.
Persistent unemployment as a result of sticky wages.
Which part of this diagram shows:
Revenue for Importers?
The quantity of a good or service that consumers are willing and able to purchase at any given price in a given time period.
What is the formula for YED?
Percentage Change Qd / Percentage Change Income
Is it possible for a country to have Comparative Advantage in both goods?
No.
A low opportunity cost in one good will mean a high opportunity cost in the other good (because the opportunity costs are reciprocal).
What is meant by innovation and market growth?
Innovation refers to the introduction of new ideas, products, or processes that create value and drive market growth. Market growth, on the other hand, refers to an increase in the overall size or revenue of a specific market.
With a linear demand curve, the point right in the middle will have PED of _____. This is called _____ _____ PED.
