A rising nominal wage causes
A)upward movement along the SAS curve.
B)downward movement along the SAS curve.
C)a downward shift of the SAS curve.
D)an upward shift of the SAS curve.

Question

Quizplus · Accepted Answer

An increase in nominal wages can increase production costs for firms, which can lead to a decrease in the aggregate supply of goods and services at every price level. This is represented by an upward shift of the Short-Run Aggregate Supply (SAS) curve.

A Rising Nominal Wage Causes