When money wages rise, the most significant effect on the aggregate supply curve is that it
A)shifts outward.
B)shifts inward.
C)becomes flatter.
D)becomes steeper.

Question

Quizplus · Accepted Answer

When money wages rise, the cost of production for businesses increases. This typically leads to a decrease in the quantity of goods and services that a firm is willing to supply at any given price level, causing the aggregate supply curve to shift inward.

When Money Wages Rise, the Most Significant Effect on the Aggregate