A decrease in the money wage rate
A) increases the long-run aggregate supply.
B) decreases the long-run aggregate supply.
C) increases the short-run aggregate supply.
D) decreases the short-run aggregate supply.

Question

Quizplus · Accepted Answer

A decrease in the money wage rate reduces production costs, leading to an increase in short-run aggregate supply as firms are willing to produce more at each price level.

A Decrease in the Money Wage Rate