Suppose the price level rises and the money wage remains constant. This set of changes leads to
A) an upward movement along the LAS curve.
B) a leftward shift of the SAS curve.
C) an upward movement along the SAS curve.
D) a leftward shift of the SAS curve and the LAS curve.

Question

Quizplus · Accepted Answer

When the price level rises and the money wage remains constant, firms experience higher profits and are willing to produce more, leading to an upward movement along the Short-Run Aggregate Supply (SAS) curve.

Suppose the Price Level Rises and the Money Wage Remains