In the upward-sloping segment of the aggregate supply curve:
A) increases in output are linked to decreases in the price level.
B) increasing prices drag down resource costs.
C) producers can hire more workers without having to raise the wage rate.
D) firms are willing to pay higher wages to get more labour.

Question

Quizplus · Accepted Answer

In the upward-sloping segment of the aggregate supply curve, firms are willing to pay higher wages to attract more labor in order to increase output, reflecting the relationship between higher demand for goods and services and the increase in production costs, including wages.

In the Upward-Sloping Segment of the Aggregate Supply Curve