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Let6 - Let' .,firms .,workersdueto

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Let's summarize the chain of events that leads from an increase in the price level to an  increase in output in the worker-misperception model. When the price level rises, firms  increase nominal wages. When nominal wages increase, workers--due to  misperceptions--believe that real wages also increase. When workers believe that real  wages increase, workers provide more labor. When workers provide more labor, output  increases.  Imperfect-Information Model  The imperfect-information model of the upward sloping short- run aggregate supply  curve is again based on the labor market. In this model, unlike either the  sticky-wage   model  or the  worker-misperception model , neither the worker nor the firm has complete  information. That is, neither is better informed than the other is about the real wage, the  nominal wage, or the price level. 
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