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Short answer problems about expansionary monetary policy, aggregate output curves.

In country A, all wage contracts are indexed to inflation. That is, each month wages are adjusted to reflect increases in the cost of living as reflected in changes in the price level.

In country B, there are no cost of living adjustments to wages, but the work force is completely unionized and the unions negotiate 3 year contracts.

In which nation is an expansionary monetary strategy likely to have a larger affect on aggregate output? describe answer with aggregate supply and aggregate demand curves.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M918289

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