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QUESTION 1 Classify the following statement as true or false

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QUESTION 1 Classify the following statement as true or false. Justify the answer. The justification is more important than the classification. In the perfectly competitive market for surgical masks, demand has increased in the short run, while neither the technology used for their production nor the price of labor (the only input variable in the short run) have changed. If the technology is characterized by decreasing marginal returns of labor, then the equilibrium price of surgical masks must have increased.

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Why does the Phillips curve relation seem to break down at high unemployment rates?