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Suppose That a Country's Workers Are Universally Protected by COLAs

Question 161

Multiple Choice

Suppose that a country's workers are universally protected by COLAs and an adverse SAS shock,occurs.After wage and price adjustments,ceteris paribus,we find


A) output falls dramatically and unemployment rises.
B) real wages decline and unemployment rises.
C) real wages rise and unemployment falls.
D) none of the above

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