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If an economy is in short - run equilibrium, with aggregate output greater than potential output, in the long run, nominal wages will q ,

If an economy is in short

-

run equilibrium, with aggregate output greater than potential output, in the long run, nominal wages will

q,

and the

q,

curve will shift to the

q,

bringing the economy back to potential output. rise; SRAS; left

rise;

A D

; right

fall; SRAS; right

fall; AD; left

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