An increase in the money wage rate will cause the aggregate supply curve to shift
A)outward, which means the quantity supplied at any price level decreases.
B)outward, which means the quantity supplied at any price level increases.
C)inward, which means the quantity supplied at any price level increases.
D)inward, which means the quantity supplied at any price level decreases.

Question

Quizplus · Accepted Answer

An increase in the money wage rate will increase the cost of production for firms, leading to a decrease in profits and a decrease in the quantity supplied at any given price level. Therefore, the aggregate supply curve will shift inward, resulting in a decrease in the quantity supplied at all price levels.

An Increase in the Money Wage Rate Will Cause the Aggregate