Macro midterm spring: Implies a procyclical real wage in the face of demand fluctuation. A rise in demand leads to rise in effective labor demand, and thus to an increase in the real wage as workers move up their labor supply curve.

Question

Implies a procyclical real wage in the face of demand fluctuation. A rise in demand leads to rise in effective labor demand, and thus to an increase in the real wage as workers move up their labor supply curve.

Daniel Ortega · Accepted Answer

Keynesian Model with rigid nominal prices

Macro midterm spring

Implies a procyclical real wage in the face of demand fluctuation. A rise in demand leads to rise in effective labor demand, and thus to an increase in the real wage as workers move up their labor supply curve.

Keynesian Model with rigid nominal prices

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