Use the table below to answer the following questions.
Table 10.3.3

-Refer to Table 10.3.3.With no interference from the central bank or the government, the
A)money wage rate will eventually fall.
B)aggregate demand curve will shift rightward.
C)long- run aggregate supply curve will shift leftward.
D)money wage rate will eventually rise.
E)short- run aggregate supply curve will shift leftward.

Question

Use the table below to answer the following questions.
Table 10.3.3
 
-Refer to Table 10.3.3.With no interference from the central bank or the government, the
A)money wage rate will eventually fall. 
B)aggregate demand curve will shift rightward. 
C)long- run aggregate supply curve will shift leftward. 
D)money wage rate will eventually rise. 
E)short- run aggregate supply curve will shift leftward.

Quizplus · Accepted Answer

With no interference from the central bank or the government, the economy will eventually reach its long-run equilibrium, where the money wage rate adjusts to equal the natural wage rate and the economy produces at potential output. As a result, the money wage rate will eventually fall to reach equilibrium.

Use the Table Below to Answer the Following Questions