An increase in the money wage rate leads to
A)an upward movement along the aggregate supply curve.
B)a downward movement along the aggregate supply curve.
C)a leftward shift of the aggregate supply curve.
D)a rightward shift of the aggregate supply curve.
E)a leftward shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in the money wage rate increases production costs, leading to a decrease in aggregate supply, which shifts the aggregate supply curve to the left.

An Increase in the Money Wage Rate Leads to