Assuming that the price level remains unchanged,what will an increase in money wages do?
A)It will not affect price or output levels.
B)It will affect the LAS curve.
C)It will mean higher profits and production levels.
D)It will mean lower profits and production levels.
E)It will mean lower profits and no change in production levels.

Question

Quizplus · Accepted Answer

An increase in money wages, assuming the price level remains unchanged, will increase production costs for businesses. This typically leads to lower profits as the cost of producing goods and services increases. Businesses may reduce output in response to higher costs, leading to lower production levels.

Assuming That the Price Level Remains Unchanged,what Will an Increase