If productivity and wages both rise by 3 percent, then the aggregate supply curve shifts up.

Name: If productivity and wages both rise by 3 percent, then the aggregate supply curve shifts up.
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Quizplus · Accepted Answer

When productivity and wages both rise by the same percentage, the cost of production per unit remains unchanged, which means there is no direct reason for the aggregate supply curve to shift up as the increase in productivity offsets the increase in wages, keeping production costs stable.

If Productivity and Wages Both Rise by 3 Percent, Then