If the money wage rate increases, the short-run aggregate supply curve shifts rightward.

Name: If the money wage rate increases, the short-run aggregate supply curve shifts rightward.
Brand: Quizplus
Rating: 4.9 (41 reviews)

Question

Quizplus · Accepted Answer

An increase in the money wage rate typically increases the cost of production for firms, leading to a decrease in the quantity of goods and services supplied at any given price level. This results in a leftward shift of the short-run aggregate supply curve, not rightward.

If the Money Wage Rate Increases, the Short-Run Aggregate Supply