Suppose the wage rate decreases. As a result we would expect:

Question

Quizplus · Accepted Answer

When the wage rate decreases, the cost of production for firms decreases, making it more profitable to produce goods and services. This leads to an increase in the quantity of goods and services supplied at every price level. This increase is reflected by a rightward shift in the positively sloped portion of the aggregate supply curve, as firms are willing and able to supply more output for every price level. Therefore, the correct answer is choice D.

Suppose the Wage Rate Decreases