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Consider an economy where the price level is stable because the real wage desired by workers is consistent with the real wage firms can offer while maintaining their target profit margin. If a new law significantly strengthens workers' bargaining power (for example, by making it easier to form unions), what is the most likely immediate consequence for the economy's price level?
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Consider an economy where the price level is stable because the real wage desired by workers is consistent with the real wage firms can offer while maintaining their target profit margin. If a new law significantly strengthens workers' bargaining power (for example, by making it easier to form unions), what is the most likely immediate consequence for the economy's price level?
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