For each of the three theories for the upward slope of the short-run aggregate-supply curve, carefully explain the following: a. How the economy recovers from a recession and returns to its long-run equilibrium without any policy intervention. b. What determines the speed of that recovery.
For each of the three theories for the upward slope of the short-run aggregate-supply curve, carefully explain the following:
a. How the economy recovers from a recession and returns to its long-run equilibrium without any policy intervention.
b. What determines the speed of that recovery.
a. How the economy recovers from a recession and returns to its long-run equilibrium without any policy intervention.
b. What determines the speed of that recovery.
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Answer
a. According to the sticky-wage theory, the economy is in a recession because the price …View the full answer
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