Suppose that the economy of Wetland shown in the following figure is in full-employment equilibrium and the present nominal wage is $800 per week
a)What is the real wage (in base year prices)?
b)Suppose that aggregate demand increases by $100.At the new equilibrium,what will be the new value of the real wage rate?
c)As a result of the change in b),suppose the nominal wage increases,causing aggregate supply to decrease by $100.At the new equilibrium,what will be the new real wage rate?
d)At the new equilibrium in c),what is the value of the nominal wage rate?
Definitions:
Starter Relay
An electrical device that transmits power to the starter motor, initiating the engine's operation in a vehicle.
Starter Solenoid
An electromagnetic switch that engages the starter motor of a vehicle, initiating the engine's starting process.
Pinion Gear
A small gear that engages with a larger gear or rack, often used in automotive differentials to transfer rotational motion.
Flywheel Ring Gear
A circular gear attached to the outer edge of a flywheel, interfacing with the starter motor to begin engine rotation.
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