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Macro midterm spring

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Question:

Implies a countercyclical wage: a rise in demand leads to an increase in prices, which decreases real wages -> which leads to a decrease in labor supply -> decrease in output.

Author: Daniel Ortega

Implies a countercyclical wage: a rise in demand leads  to an increase in prices, which decreases real wages -> which leads to a decrease in labor supply -> decrease in output.



Answer:

Keynesian Model with rigid nominal wages


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