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For Each of the Two Models of Short-Run Aggregate Supply

question 95

Essay

For each of the two models of short-run aggregate supply (sticky price and imperfect information)compare the following characteristics:
a.whether the market imperfection is located in the goods market or the labour market
b.whether prices are flexible or fixed
c.whether the goods market and the labour market clear instantly.


Definitions:

Terminate Membership

The act of ending an individual’s affiliation or association with a group or organization.

Control Compatibility

The alignment or congruence between the control mechanisms in place within an organization or system and the tasks or processes they are meant to guide or regulate.

Originator

An individual or entity that creates or initiates something, such as an idea, project, or product.

Interchange

The act of (or a place designed for) exchanging things, ideas, or communications between people or groups.

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