In terms of aggregate supply, the short run is a period in which
A) the price level is constant.
B) employment is constant.
C) real output is constant.
D) nominal wages and other resource prices are unresponsive to price-level changes.

Question

Quizplus · Accepted Answer

In the short run, nominal wages and other resource prices are typically sticky, meaning they do not adjust quickly to changes in the price level. This results in a downward sloping aggregate supply curve in the short run, as firms face higher costs of production when prices rise but cannot immediately adjust their input prices.

In Terms of Aggregate Supply, the Short Run Is a Period