An economy is heavily dependent on an imported raw material. If the global price of this material rises sharply, and domestic firms respond by raising their product prices to protect their profit margins, what is the most likely immediate effect on the real wage and the price-setting (PS) curve?
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An economy is heavily dependent on an imported raw material. If the global price of this material rises sharply, and domestic firms respond by raising their product prices to protect their profit margins, what is the most likely immediate effect on the real wage and the price-setting (PS) curve?
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