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Assume that the percentage of the labor force covered by labor contracts that set wages for a predet

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Assume that the percentage of the labor force covered by labor contracts that set wages for a predet

Assume that the percentage of the labor force covered by labor contracts that set wages for a predetermined period of time decreases. This will tend to:
A) have no impact on the effectiveness of either monetary or fiscal policy.
B) increase the effectiveness of fiscal policy, but decrease the effectiveness of monetary policy.
C) increase the effectiveness of both monetary and fiscal policy.
D) decrease the effectiveness of both monetary and fiscal policy.

Textbook

Principles of Macroeconomics

Edition: 11^th

Authors: Case, Fair, Oster

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