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Monetarists argue that in the long run there is no Philip curve trade-off as Long Run AS is inelastic. If there is an increase in aggregate demand, then workers demand higher nominal wages. When they receive higher nominal wages, they work longer hours because they feel real wages have increased. (their price expectations are based on last year). However, this increase in AD causes inflation, and therefore, real wages stay the same. When they realise real wages are the same as last year, they change their price expectations, and no longer supply extra labour and the real output returns to its original level. Therefore, unemployment remains unchanged, but we have a higher inflation rate. Hence in long run, the Philip curve is vertical.
Which trilateral exercise aims to enhance maritime security and interoperability among India, the Maldives, and Sri Lanka?
What is the primary purpose of the C-295MW transport aircraft received by the Indian Air Force from Airbus?
Who won the 2022 Adelaide International 1 tennis tournament played in Adelaide, South Australia, Australia?
Fragrance & Flavour Development Centre has been set-up in the year 1991 by Ministry of ____________.
What does the State of the Cryosphere Report 2023 warn about the impact of a 2°C global warming scenario?
In which of the following Indian currency notes the Chariot of Hampi (Karnataka) is inscribed?
Which Indian state has initiated a caste-based census, becoming the second statefter Bihar to undertake this exercise?