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The Short-Run Aggregate Supply Curve (AS)presented in the Textbook Has

Question 38

Multiple Choice

The short-run aggregate supply curve (AS) presented in the textbook has its particular shape because of which of the following explanations?


A) a reduction in the aggregate price level will cause a reduction in the interest rate and an increase in output.
B) an increase in the aggregate price level causes an increase in nominal money demand and an increase in the interest rate.
C) a drop in the nominal wage causes an increase in the amount of output that firms are willing to produce.
D) a reduction in output causes a reduction in employment,an increase in unemployment,a reduction in the nominal wage and a reduction in the price level.

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