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1.For each of the following cases, determine which would be the preferred macroeconomic model to analyze the business fluctuations. a)Most wages are the result of
1.For each of the following cases, determine which would be the preferred macroeconomic model to analyze the business fluctuations.
a)Most wages are the result of collective bargaining and are therefore quite rigid. In addition, expectations are based mostly on past data.
b)Few process are rigid and economic agents' expectations respond quickly to changes in variables and policy changes that affect how macroeconomic variable are determined.
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