Initial equilibrium to short and long-run equilibrium

Reference no: EM13692469

Explain what is the short-run effect of a fiscal contraction (lower government spending for example)? What happens to the nominal wage rate during the process of moving from short-run equilibrium to long run equilibrium? What about real wage rate. Draw carefully all the steps from the initial equilibrium to short and long-run equilibrium.

Reference no: EM13692469

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