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QUESTION
What if there is asymmetric information and labor is duped or late in recognizing the price change?
What if there is asymmetric information and labor is duped or late in recognizing the price change? YS Firms see price increase and raise demand. Labor does not and thinks its real wage has risen so works more! More output is produced and Aggregate Supply is flatter. Pulling it all together What shifts aggregate demand? What shifts aggregate supply?
