If the money wage rate falls,then
A)the AD curve shifts rightward.
B)firms hire less labour.
C)the LAS curve shifts rightward.
D)the SAS curve shifts rightward.
E)C and D.

Question

Quizplus · Accepted Answer

A fall in the money wage rate reduces production costs, leading to an increase in short-run aggregate supply (SAS), shifting the SAS curve rightward. The long-run aggregate supply (LAS) curve is not affected by changes in the wage rate.

If the Money Wage Rate Falls,then