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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Discuss the details of the worker misperceptions explanation for the upward-sloping SRAS curve.

To determine

Describe the workers’ misperceptions for SRAS curve with an explanation.

Explanation

In an economy, workers initially misperceive the change in real wage because of the change in the price level. (Example: If the nominal wage is $30 and the price level is 1.50, then the value of real wage is 20(301.5). If nominal wage decreases from $30 to $20 and the price level decrease to 1.10, then the value of real wage is 22.72(251.10)

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