Along a short-run aggregate supply curve firms are willing to produce more output if a ________ causes the real wage to ________.
A)higher nominal wage,rise
B)lower nominal wage,fall
C)higher price level,rise
D)lower nominal wage,rise
E)higher price level,fall

Question

Quizplus · Accepted Answer

In the short-run aggregate supply curve, firms are willing to produce more output if a higher price level causes the real wage to fall, as this increases profitability and incentivizes production.

Along a Short-Run Aggregate Supply Curve Firms Are Willing to Produce