Sticky wages leads to a positive relationship between the actual price level and the quantity of output supplied in
A)both the short and long run.
B)the short run, but not the long run.
C)the long run, but not the short run.
D)neither the short nor the long run.

Question

Quizplus · Accepted Answer

Sticky wages cause the quantity of output supplied to increase as the actual price level increases, but this effect is primarily observed in the short run. In the long run, wages adjust, and the relationship does not hold, making the economy's output depend more on factors like technology and resources rather than the price level.

Sticky Wages Leads to a Positive Relationship Between the Actual