Moving along the short-run aggregate supply curve,___________
A) the money wage rate, the prices of other resources, and potential GDP remain constant
B) real GDP equals nominal GDP
C) the real wage rate is constant
D) real GDP equals potential GDP

Question

Quizplus · Accepted Answer

Along the short-run aggregate supply curve, the money wage rate, prices of other resources, and potential GDP remain constant in the short run. Therefore, choice A is the correct answer. Real GDP and nominal GDP can be different, and the real wage rate may change as well. Real GDP may be less than, equal to, or greater than potential GDP depending on the current state of the economy.

Moving Along the Short-Run Aggregate Supply Curve,___________