In the upward-sloping segment of the aggregate supply curve,
A) increases in output are linked to decreases in the price level.
B) firms are willing to pay higher wages to get more labor.
C) producers can hire more workers without having to raise the wage rate.
D) the economy can increase aggregate supply without prices going up.

Question

Quizplus · Accepted Answer

In the upward-sloping segment of the aggregate supply curve, firms are willing to pay higher wages to get more labor in order to increase production, reflecting a situation where the economy is nearing its full capacity, and additional output can only be achieved at higher costs.

In the Upward-Sloping Segment of the Aggregate Supply Curve