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In Westworld, all wage contracts are indexed to inflation. That is, each month wages are adjusted to reflect increases in the cost of living as
In Westworld, all wage contracts are indexed to inflation. That is, each month wages are adjusted
to reflect increases in the cost of living as reflected in changes in the price level. In Westeros, there
are no cost-of-living adjustments to wages, but the workforce is completely unionized. Unions
negotiate 3-year contracts. In which country is an expansionary monetary policy likely to have a
larger effect on aggregate output? Explain your answer using aggregate supply and aggregate
demand curves.
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