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Answer to Question #224573 in Macroeconomics for Hina
Question #224573
Explain the effect of a decrease in the stock of wealth on real wages? aggregate employment and aggregate output supply?
Expert's answer
A decrease in the stock of wealth will lead to a decrease in labor, leading to a decline in real wages and aggregate employment. This will, in turn, decrease the output produced, thereby shifting the supply curve to the left.
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