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  3. 3 consider the following aggregate supply where yn is a...

Question: 3 consider the following aggregate supply where yn is a...

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3. Consider the following Aggregate supply: where yn is a natural level of output, and w is nominal wage rate. A. Suppose that the wage rate is flexible and adjust fully to any change in price level such that p-w.. Derive AS curve and explain. B. Suppose that wage rate is fixed at What does AS curve look like? C. Using AD curve derived in Question 1. D, calculate the equilibrium price and output level when wage is fully flexible. What would happen to the equilibrium output and price level if money supply increases. D. Repeat Question C with assumption that wage is fixed at tu. idar tho falltring ADAS Madel discussed in the class
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