Everything else held constant,a change in workers' expectations about the aggregate price level will cause ________ to change.
A)aggregate demand
B)short-run aggregate supply
C)the production function
D)long-run aggregate supply

Question

Quizplus · Accepted Answer

A change in workers' expectations about the aggregate price level affects short-run aggregate supply because it influences wage demands and production costs, which in turn affect the quantity of goods and services that firms are willing to produce at different price levels in the short run.

Everything Else Held Constant,a Change in Workers' Expectations About the Aggregate