If there are sticky wages,and the price level is greater than what was expected,then
A)the quantity of aggregate goods and services supplied falls,which is shown by a shift of the short-run aggregate supply curve to the left.
B)the quantity of aggregate goods and services supplied falls,as shown by a movement to the left along the short-run aggregate supply curve.
C)the quantity of aggregate goods and services supplied rises,as shown by a shift of the short-run aggregate supply curve to the right.
D)the quantity of aggregate goods and services supplied rises,as shown by a movement to the right along the short-run aggregate supply curve.

Question

Quizplus · Accepted Answer

When the price level is higher than expected and wages are sticky, firms experience higher profits and are incentivized to increase production, leading to a movement to the right along the short-run aggregate supply curve.

If There Are Sticky Wages,and the Price Level Is Greater