-In the above figure, the economy is at point A and the money wage rate rises by 10 percent. If the price level is constant, 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 and the money wage rate rises by 10 percent. If the price level is constant, 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

If the money wage rate rises by 10 percent while the price level remains constant, firms will face higher production costs. This typically leads to a decrease in the quantity of output they are willing to supply, resulting in an output level less than $12.0 trillion.

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