In Chapter 8,the SAS curve is upward-sloping.One assumption that justifies this is that
A)that natural real GDP never exceeds actual real GDP.
B)that wage rates adjust instantaneously.
C)the use of long-term wage agreements.
D)All of the above.

Question

Quizplus · Accepted Answer

The SAS (Short-Run Aggregate Supply) curve is upward-sloping partly because of the use of long-term wage agreements, which do not adjust instantly to changes in the economy, causing prices to adjust more quickly than wages in the short run.

In Chapter 8,the SAS Curve Is Upward-Sloping