-In the above figure, the economy is at point A and the money wage rate falls by 10 percent. If the price level is constant, firms will be willing to supply output equal to
A) more than $12.0 trillion
B) $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 and the money wage rate falls by 10 percent. If the price level is constant, firms will be willing to supply output equal to
A) more than $12.0 trillion 
B) $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

A fall in the money wage rate reduces production costs, making firms willing to supply more output at the same price level, thus more than $12.0 trillion.

-In the Above Figure, the Economy Is at Point a and the Money