A rise in the money wage rate shifts the
A) AS curve rightward.
B) AD curve rightward.
C) AD curve leftward.
D) potential GDP curve rightward.
E) AS curve leftward.

Question

Quizplus · Accepted Answer

A rise in the money wage rate increases the cost of production for businesses, which typically reduces the quantity of goods and services that a firm is willing to supply at any given price level. This is represented by a leftward shift of the Aggregate Supply (AS) curve.

A Rise in the Money Wage Rate Shifts the