Answer to Question #72009 in Macroeconomics for Sarah
in the question above I'm confused about what is meant by ''What is the effect on the supply function'' i tried to solve it assuming that supply function is the aggregate supply. Markup increases then wage decrease so AS shifts right because workers are willing to accept any salary. Is my answer right?
As wage decreases, markup grows. Therefore, AS shifts right because workers are willing to accept any salary.
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