Explain how the degree of short-run nominal wage inertia affect... | Filo
Explain how the degree of short-run nominal wage inertia affect... | Filo
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Suppose an economy is in long-run equilibrium. The central bank reduces the money supply by 5 percent.Use your diagram to show what happens to output and the price level as the economy moves from the initial to the new short-run equilibrium.Now adjust the graph to show the new long-run equilibrium.What causes the economy to move from its short-run equilibrium to its long-run equilibrium?The government increases spending to increase aggregate demand.The government increases taxes to curb aggregat
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