In the short run with a model with sticky prices a negative monetary surprise:

Name: In the short run with a model with sticky prices a negative monetary surprise:
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Question

Quizplus · Accepted Answer

In a model with sticky prices, a negative monetary surprise leads to a decrease in aggregate demand, causing firms to decrease their output level and labour demand. As a result, workers' bargaining power decreases, leading to a decrease in the real wage. Therefore, all of the choices (A, B, and C) are correct.

In the Short Run with a Model with Sticky Prices