The quantity of real GDP supplied ________ when the price level increases because ________.
A)decreases;investment increases
B)increases;the real wage rate falls
C)increases;the quantity of money increases
D)decreases;the real wage rate rises
E)increases;aggregate demand increases

Question

Quizplus · Accepted Answer

When the price level increases, the real wage rate falls, making labor cheaper for firms, which encourages them to hire more workers and increase production, thus increasing the quantity of real GDP supplied.

The Quantity of Real GDP Supplied ________ When the Price