If the money wage rate rises, then the
A) SAS curve shifts leftward.
B) SAS curve shifts rightward.
C) LAS curve shifts rightward.
D) LAS curve shifts leftward.

Question

Quizplus · Accepted Answer

An increase in the money wage rate increases production costs, leading to a decrease in short-run aggregate supply, which shifts the SAS curve leftward. The LAS curve is not affected by changes in the money wage rate.

If the Money Wage Rate Rises, Then the