A rise in price expectations that causes wages to rise causes the short-run aggregate supply curve to shift left.

Name: A rise in price expectations that causes wages to rise causes the short-run aggregate supply curve to shift left.
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Question

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When price expectations rise, workers demand higher wages to maintain their purchasing power, increasing production costs for firms and causing the short-run aggregate supply curve to shift left.

A Rise in Price Expectations That Causes Wages to Rise