At any AD/SAS intersection to the left of LAS,excess ________ in the labor market is putting ________ pressure on the nominal wage.
A)supply,upward
B)supply,downward
C)demand,upward
D)demand,downward

Question

Quizplus · Accepted Answer

At any AD/SAS intersection to the left of LAS (long-run aggregate supply), there is excess supply of labor in the market (since the economy is producing below its potential), and this puts downward pressure on the nominal wage. Therefore, the correct answer is B, where excess supply is represented by "supply" and the downward pressure on nominal wage is represented by "downward".

At Any AD/SAS Intersection to the Left of LAS,excess ________