ISI 2017 key

[Daffodils]

yeah 83.. and wage indexation question . i couldnt get the explanation for it .

[Asd1995]

more updating of wages, more you go to a vertical supply curve since the reason supply curve in not totally vertical is wage stickiness. if there's no stickiness (updation of wages), supply curve will be more vertical.

[Daffodils]

ok so wage indexation relative to no indexation makes my supply curve more more vertical and hence the effect of  unemployment to inflation will lower?
Am i correct?

[Asd1995]

slope of supply curve= change in inflation/change in employement so more vertical supply curve means change in employement is less due to inflation, conversely change in inflation is more due to particular change in unemployement.

since this is more classical case any increased costs are passed down as prices, hence inflation is high.

so i don't think you're correct, but hey i'm no expert.

edit: this can be done without supply analysis. if wages are updated firms have to increase the product prices since costs have increased leading to higher inflation

[Daffodils]

I'm really confused and messed up with this topic.

[Asd1995]

let me be more detailed

slope of supply curve= delta (p)/delta (y)== inflation/output==inflation/employement

hence inflation=slope * employement

if slope is high, particular change in employement has more effect on inflation (since these are being multiplied)

[Daffodils]

correct..  so i have this question wrong

[Asd1995]

sorry bhai :p

we all screwed up something. i exchanged < with > in the ak<bl question, forgot consumer surplus in 3rd question, differentiation went wrong in one.

good luck with the results!

[Daffodils]

Hey, i'm a girl, not a boy.

[Asd1995]

my bad. daffodil-yeah, username checks out!

[Asd1995]

also- anyone in your circle getting 90 plus in eco?

[Halflife]

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[Halflife]

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[Halflife]

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[Daffodils]

4-5

[Asd1995]

Yeah I'm sitting at exactly 90 in economics and 104 in Math. If daffodils is correct then I'm concerned whether any of us would get in, 4-5 people she knows are 90+ in eco.

Idk about budget multiplier maine bhi galat hi kiya hai, I just googled it and it said g and t change by the same amount so I applied that.

[Halflife]

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[Asd1995]

I was sure too until today.. Now I'm concerned. Anyhow have you started interviews prep? If so, what are you preparing?

[Halflife]

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[Asd1995]

I meant ISI.. I'm only applying there.