Re: Dse 2010 Q44

Posted by phelps.phan on Jun 18, 2014; 7:37am
URL: http://discussion-forum.276.s1.nabble.com/Dse-2010-Q44-tp7592978p7592988.html

44.From the given information you can get the output
Y= aK + b(-g + dW/P)
where a is alpha , b is beta g is gamma d dis delta
Now for very high P, W/P=0 so Y is vertical
for a moderate P, as P increases Y decreases, so in the Y-P domain the slope is negative which brings us to option c. I'm not sure how we get it as vertical for low P. It might be because infinite Y is not possible.

45.For a given P, Y is increased because K is increased, so it should shift right

46.I'm not sure why the answer is shift up, to me it should shift right. Since Nominal wage is increased W increases for a given P. which results in Y increasing for a given P which is shift right.