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Wage-setting curve in the medium run equilibrium

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Reference no: EM132090021

In a labour market model, we shall assume that the economy is always on the wage-setting curve and only on the price-setting surve in the medium- run equilibrium. How would this model react to a demand shock as opposed to having the economy always on the price- setting curve and only the wage-setting curve in the medium run equilibrium?

Reference no: EM132090021

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