Why would equal-sized fall in aggregate output due to a fall

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In Northlandia, there are no labor contracts; that is, wagerates can be renegotiated at any time. But in Southlandia, wagerates are set at the beginning of each odd year and last for twoyears. Why would equal-sized falls in aggregate output due to afall in aggregate demand have different effects on the magnitudeand duration of unemployment in these two economies?

Reference no: EM13243325

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