What is true of a movement up the aggregate supply curve?
A)The nominal wage remains constant but the real wage declines.
B)The real wage remains constant but the nominal wage declines.
C)The real wage remains constant but the nominal wage increases.
D)Both the nominal and real wages decline.

Question

Quizplus · Accepted Answer

Moving up the aggregate supply curve typically occurs when the price level increases, causing the nominal wage to remain constant while the real wage (the purchasing power of the nominal wage) declines. This is because the real wage is adjusted for inflation, and an increase in the price level without a corresponding increase in nominal wages reduces the amount of goods and services workers can buy with their wages.

What Is True of a Movement Up the Aggregate Supply