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Instructions: For each of the following, illustrate and explain the changes to AD and AS, output, price levels and employment that will occur in the
Instructions: For each of the following, illustrate and explain the changes to AD and AS,
output, price levels and employment that will occur in the short-run and in the long-run. Assume
that wages are "sticky" in the short-run and "flexible" in the long-run.
3. The government raises the minimum wage.
Explain the short-run and long-run consequences of the change described above:
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