Which of the following occurs while moving along a short-run aggregate supply curve?
A) The money wage rate and the price level change by the same percentage.
B) The money wage rate changes and the price level is constant.
C) The price level changes and the money wage rate is constant.
D) Neither the price level nor the money wage rate changes.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve assumes that the money wage rate is constant, and it shifts due to changes in the price level. This reflects the idea that in the short run, firms can adjust the number of goods they supply in response to changing prices, but wages (costs) are sticky and do not adjust immediately.

Which of the Following Occurs While Moving Along a Short-Run