Compare two economies. In economy A, firms change their prices often throughout the year. In economy B, firms change their prices only once a year. Economy A has a high minimum wage and very generous unemployment insurance. Economy B has neither of those things. Otherwise the two economies are identical. a. Which of the two economies has a higher long-run level of output? Explain. b. Which of the two economies has the steeper short-run aggregate-supply curve? Explain. c. Suppose there is an increase in aggregate demand. Which of the two economies experiences a greater expansion on output? which experiences a higher inflation? Illustrate your answer with a graph.