-In the above figure, the economy is at point A when the money wage rate and the price level both fall by 10 percent. Firms will be willing to supply output equal to
A) $12.0 trillion
B) more than $12.0 trillion
C) less than $12.0 trillion
D) Without more information, it is impossible to determine which of the above answers is correct.

Question

-In the above figure, the economy is at point A when the money wage rate and the price level both fall by 10 percent. Firms will be willing to supply output equal to
A) $12.0 trillion 
B) more than $12.0 trillion 
C) less than $12.0 trillion 
D) Without more information, it is impossible to determine which of the above answers is correct.

Quizplus · Accepted Answer

The fall in the money wage rate and the price level will shift the aggregate supply curve to the right, leading to an increase in the quantity of output supplied.

-In the Above Figure, the Economy Is at Point a When