An increase in the money wage rate shifts the SAS curve ________ and an increase in the money prices of raw materials shifts the SAS curve ________.
A)leftward; rightward
B)rightward; leftward
C)rightward; rightward
D)leftward; leftward

Question

Quizplus · Accepted Answer

An increase in the money wage rate and the money prices of raw materials both increase production costs, leading to a decrease in short-run aggregate supply, shifting the SAS curve leftward.

An Increase in the Money Wage Rate Shifts the SAS