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The general price level is a hypothetical measure of overall prices for some set of goods and services (the consumer basket), in an economy or monetary union during a given interval (generally one day), normalized relative to some base set. Typically, the general price level is approximated with a daily price index, normally the Daily CPI.
Severance packages are often negotiable, and employees can hire a lawyer to review the package (typically for a fee), and potentially negotiate. However, employees are never entitled to any severance package upon termination or lay-offs. [3] Severance packages vary by country depending on government regulation.
In economics, nominal rigidity, also known as price-stickiness or wage-stickiness, is a situation in which a nominal price is resistant to change. Complete nominal rigidity occurs when a price is fixed in nominal terms for a relevant period of time. For example, the price of a particular good might be fixed at $10 per unit for a year.
If you receive severance pay from a former employer, you may actually end up in a pretty good place financially. Many severance packages pay 50% to 100% of wages for a specified time period, and if...
The income effect is the change in quantity demanded due to the effect of the price change on the consumer's total buying power. Since for the Marshallian demand function the consumer's nominal income is held constant, when a price rises his real income falls and he is poorer. If the good in question is a normal good and
Part of the reason investors fled the stock market in 2022 was over fears of a potential recession in 2023. With inflation reaching multi-decade highs and the Fed aggressively raising interest ...
A good may be a Giffen good at the individual level but not at the aggregate level (or vice-versa). As shown by Hildenbrand's model, aggregate demand will not necessarily exhibit any Giffen behavior even when we assume the same preferences for each consumer, whose nominal wealth is uniformly distributed on an interval containing zero.
In these macroeconomic models with sticky prices, there is a positive relation between the rate of inflation and the level of demand, and therefore a negative relation between the rate of inflation and the rate of unemployment. This relationship is often called the "New Keynesian Phillips curve".