The short run aggregate supply curve slopes upwards due to the fact that A. Prices and wages...
Question:
The short run aggregate supply curve slopes upwards due to the fact that
A. Prices and wages adjust immediately to economic shocks.
B. Households feel wealthier at lower prices.
C. Prices and wages may be sticky in the short run.
Wage
The wage in the labor market is determined when the labor demand is equal to the labor supply. Therefore, at the equilibrium rate, there will be no situation of excess demand or supply in the economy.
Answer and Explanation: 1
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View this answerThe correct answer is option C. The price and wage is sticky in the short run.
In the short run, the prices are sticky in nature, and it would not...
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Adjusting Wages for the Inflation Rate
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Learn about wage growth vs. inflation. Discover examples of how to adjust for inflation, and examine criticisms of how wages are adjusted for inflation.
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