A decrease in the price level accompanied by no change in the money wage rate leads to ____________ Movement along the ____________aggregate supply curve.
A) a downward; long-run
B) an upward; long-run
C) an upward; short-run
D) a downward; short-run

Question

A decrease in the price level accompanied by no change in the money wage rate leads to ____________ Movement along the  ____________aggregate supply curve.
A) a downward; long-run
B) an upward; long-run
C) an upward; short-run
D) a downward; short-run

Quizplus · Accepted Answer

A decrease in the price level with no change in the money wage rate leads to a downward movement along the short-run aggregate supply curve, as firms respond to lower prices by reducing output.

A Decrease in the Price Level Accompanied by No Change