If people correctly expect an increase in aggregate demand, their money wage rate immediately, the SAS curve shifts .
A) rises; leftward
B) rises; rightward
C) fall; leftward
D) falls; rightward

Question

Quizplus · Accepted Answer

If people expect an increase in aggregate demand, they anticipate higher prices and demand higher wages, causing the short-run aggregate supply (SAS) curve to shift leftward due to increased production costs.

If People Correctly Expect an Increase in Aggregate Demand, Their