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

Question

Quizplus · Accepted Answer

In the short run, nominal wages and other input prices are considered fixed, meaning that changes in the price level will have an effect on the level of real output supplied by firms. This is known as the sticky price theory, which suggests that nominal wages and prices are "sticky" in the short run and do not adjust quickly to changes in demand or supply.

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