Why Do Wage Increases Along with Increases of Other Input

question 81

Essay

Why do wage increases along with increases of other input prices impact the short-run aggregate supply but not the long-run aggregate supply, unless they reflect permanent reductions in the supply of those inputs?

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Definitions:

China

The world's most populous country, with a complex economy that is one of the largest globally and a rich cultural history.

Soviet Union

A former federal socialist state in Eastern Europe and Northern Asia, existing from 1922 until its dissolution in 1991, comprising multiple Soviet republics.

Communist System

A political and economic system aiming for a classless society, where the means of production are owned and controlled by the community as a whole.

Consumer Decisions

This term refers to the choices made by individuals or groups regarding the consumption of goods and services.