In Exhibit 3, the self-correction argument is that in the long run competition:
A)from unemployed workers causes an increase in nominal wages and a leftward shift in SRAS.
B)from unemployment workers causes a rightward shift in LRAS.
C)among firms for workers increases nominal wages and this causes a leftward shift in SRAS.
D)among consumers causes an increase in the CPI and a rightward shift in SRAS.

Question

Quizplus · Accepted Answer

In the long run, competition among firms for workers can lead to higher nominal wages, which increases production costs and causes the short-run aggregate supply (SRAS) curve to shift leftward.

In Exhibit 3, the Self-Correction Argument Is That in the Long