Figure 8-5 Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve.
-Refer to Figure 8-5. In the long run, any price level is consistent with a real wage of $40,000 because

Question

Figure 8-5  Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve.
-Refer to Figure 8-5. In the long run, any price level is consistent with a real wage of $40,000 because

Quizplus · Accepted Answer

In the long run, nominal wages are perfectly flexible, allowing them to adjust to changes in the price level, ensuring that the real wage remains constant at $40,000.

Figure 8-5 Panel (A) Shows an Economy's Aggregate Production