Figure 8-5

-In Figure 8-5 above,from point B suppose the nominal wage rises by 5 percent while aggregate demand remains constant.As a result we
A)move to point C.
B)move to point D.
C)move to point F.
D)move to point A.
E)remain at point B.

Question

Figure 8-5
 
-In Figure 8-5 above,from point B suppose the nominal wage rises by 5 percent while aggregate demand remains constant.As a result we
A)move to point C. 
B)move to point D. 
C)move to point F. 
D)move to point A. 
E)remain at point B.

Quizplus · Accepted Answer

The increase in nominal wage will shift the short-run Phillips curve upwards, causing a decrease in aggregate output and an increase in the price level. This will result in a movement from point B to point D.

Figure 8-5 -In Figure 8-5 Above,from Point B Suppose the Nominal Wage