Those who believe that the wage rate does not adjust quickly to clear the labor market are likely to believe that the aggregate supply curve is vertical.

Question

Quizplus · Accepted Answer

Those who believe that the wage rate does not adjust quickly to clear the labor market are likely to believe in wage stickiness, which is associated with the idea that the aggregate supply curve is upward sloping, not vertical. A vertical aggregate supply curve implies that output is not affected by the price level, which is a different concept.

Those Who Believe That the Wage Rate Does Not Adjust