As the countries of eastern europe moved toward


During the period of Communist rule in Eastern Europe, the governments imposed wage and price controls. Under these controls, some prices were unchanged for years at a time. Most economists believe that over time, price controls distort the allocation of resources in an economy. Assuming that this view of price controls is correct, how would they affect long-run aggregate supply? As the countries of Eastern Europe moved toward market-oriented economies, they removed most wage and price controls. How would the removal of these controls have affected aggregate demand and aggregate supply?

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