Problem
Consider two economies, both in recession. In the first economy, all workers have long term contracts that guarantee high nominal wages for the next five years. In the second economy, all workers have annual contracts that are indexed to changes in the price level. Which economy will return to the natural rate of output first? Explain your response.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.