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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.
In the following question, four words have been given out of which one word is incorrectly spelt. Select the incorrectly spelt word.
In each of the following questions, a word has been given and used in three statements. You are supposed to identify which of the statement/s use/s the ...
Select the most appropriate synonym of the given word.
FOUNDATION
Cognizant
(i) He was cognizant of the peculiarities of the case.
(ii) All who travel should be over cognizant of this fact.
(ii...
Select the correctly spelt word.
In each of the following questions, a word has been used in sentences in THREE different ways. Choose the option corresponding to the sentences in whic...
In the following question, a word has been given and there are three ways in which the word has been used, in similar or different forms. You need to s...
In the question below, three sentences are given, each of which has two words highlighted in bold. Choose the word in each sentence that fits appropria...
In the question below, a sentence is given, four words have been highlighted in bold. Find out if the words are appropriate (grammatically and context...
Select the word that best expresses the meaning of the underlined word.
He made some very pertinent comments. They would certain...
