A new government regulation significantly reduces the ability of firms to prevent their employees from leaving to work for a competitor. Within a model where the equilibrium real wage is determined by the intersection of a wage-setting (WS) relationship and a price-setting (PS) relationship, what is the predicted impact of this regulation?

Dual Impact of Labor Mobility on Real Wages

A new labor market policy is implemented that significantly enhances workers' ability to move between competing firms. In a model where the real wage is determined by the interplay of wage-setting (WS) and price-setting (PS) behaviors, what is the most likely effect on the curves that represent these behaviors?

In a standard wage-setting/price-setting framework, a new law that prohibits employers from restricting their employees from joining a rival firm is predicted to raise the equilibrium real wage exclusively through an upward shift of the wage-setting curve.

A new government policy is enacted that prohibits firms from restricting their employees from joining competing companies. Match each resulting economic effect with its corresponding impact within the wage-setting/price-setting (WS-PS) framework.