An increase in the money wage rate shifts the short-run aggregate supply curve ________; an increase in technology shifts the long-run aggregate supply curve ________.
A) rightward; rightward
B) rightward; leftward
C) leftward; rightward
D) leftward; leftward

Question

Quizplus · Accepted Answer

An increase in the money wage rate makes production more expensive for businesses, leading to a decrease in the quantity of goods and services supplied at any given price level, shifting the short-run aggregate supply (SRAS) curve leftward. An increase in technology improves productivity, allowing more to be produced with the same inputs, which shifts the long-run aggregate supply (LRAS) curve rightward, reflecting potential economic growth.

An Increase in the Money Wage Rate Shifts the Short-Run