The Short- Run Aggregate Supply Curve Is Upward Sloping Because

question 435

Multiple Choice

The short- run aggregate supply curve is upward sloping because

• A) a lower price level creates a wealth effect.
• B) most business firms operate with long- term contracts for output but not labor.
• C) money wage rates do not immediately change when the price level changes.
• D) lower taxes motivate people to work more.

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