An increase in the money wage rate shifts the short-run aggregate supply curve ________, while an increase in technology shifts the long-run aggregate supply curve ________.
A) rightward; rightward
B) rightward; leftward
C) leftward; rightward
D) leftward; leftward

Question

Quizplus · Accepted Answer

An increase in the money wage rate makes production more expensive for businesses, reducing the quantity of goods and services they are willing to supply at any given price level, thus shifting the short-run aggregate supply (SRAS) curve leftward. An increase in technology improves productivity, allowing more to be produced with the same inputs, which shifts the long-run aggregate supply (LRAS) curve rightward, reflecting potential economic growth.

An Increase in the Money Wage Rate Shifts the Short-Run