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Downward nominal wage rigidity (DNWR) refers to a situation where firms are readily able to increase nominal wages in the short run, but they

 

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Downward nominal wage rigidity (DNWR) refers to a situation where firms are readily able to increase nominal wages in the short run, but they are unable to reduce them. Consider the sticky-wage model, but suppose that instead of firms facing sticky wages, they face DNWR. What does the short-run aggregate supply curve (SRAS) look like in this case? Explain.

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