If employers win major wage concessions in many industries,how will this affect short-run aggregate supply?
A)It will shift right (an increase in aggregate supply).
B)It will shift left (an increase in aggregate supply).
C)It will shift left (a decrease in aggregate supply).
D)It will shift right (a decrease in aggregate supply).

Question

Quizplus · Accepted Answer

The major wage concessions obtained by employers will reduce their labor costs, which will increase their profits and their motivation to increase output in the short run. This will lead to an increase in short-run aggregate supply, shifting the curve to the right.

If Employers Win Major Wage Concessions in Many Industries,how Will