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In the sticky-price model of Aggregate Supply, some firms adjust prices each period, and some firms set prices one period in advance. Setting prices in
In the sticky-price model of Aggregate Supply, some firms adjust prices each period, and some firms set prices one period in advance. Setting prices in advance is more costly to firms when inflation is higher. With this context, would you expect Aggregate Supply curves to be steeper or flatter in higher-inflation economies vs. lower inflation economies? Briefly explain.
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