Moving along the short-run aggregate supply curve,
A) the real wage rate is constant.
B) real GDP equals potential GDP.
C) the money wage rate, the prices of other resources, and potential GDP remain constant.
D) real GDP equals nominal GDP.

Question

Quizplus · Accepted Answer

Moving along the short-run aggregate supply curve implies that the money wage rate, the prices of other resources, and potential GDP remain constant. Changes in the quantity of real GDP supplied are due to changes in the price level, not changes in these underlying factors.

Moving Along the Short-Run Aggregate Supply Curve