An increase in the minimum wage would likely:
A) cause a movement up the short-run aggregate supply curve from left to right.
B) cause a movement down the short-run aggregate supply curve from right to left.
C) shift the short-run aggregate supply curve to the right.
D) shift the short-run aggregate supply curve to the left.

Question

Quizplus · Accepted Answer

An increase in the minimum wage increases the cost of labor for businesses. This generally leads to a decrease in the quantity of goods and services that firms are willing to supply at any given price level, which is represented by a leftward shift in the short-run aggregate supply curve.

An Increase in the Minimum Wage Would Likely