The economy's AS curve will shift upward in the short run if there is
A)an improvement in technology.
B)a decrease in the cost of capital.
C)an increase in the price level.
D)a decrease in nominal wages.
E)an increase in nominal wages.

Question

Quizplus · Accepted Answer

An increase in nominal wages raises production costs for firms, leading to a decrease in aggregate supply, which shifts the AS curve upward in the short run.

The Economy's AS Curve Will Shift Upward in the Short