In terms of aggregate supply, the short run is a period in which:
A)the price level is constant.
B)employment is constant.
C)real GDP is constant.
D)nominal wages and other input prices are constant.

Question

Quizplus · Accepted Answer

In the short run, nominal wages and other input prices are typically sticky or inflexible, meaning they do not adjust quickly to changes in the economy. Therefore, the level of aggregate supply is largely determined by these fixed input prices, while output and employment levels can still fluctuate. The price level and real GDP can both vary in the short run as a result of changes in aggregate demand.

In Terms of Aggregate Supply, the Short Run Is a Period