When Money Wages Rise, the Most Significant Effect on the Aggregate

question 124

Multiple Choice

When money wages rise, the most significant effect on the aggregate supply curve is that it

• A)shifts outward.
• B)shifts inward.
• C)becomes flatter.
• D)becomes steeper.

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Definitions:

Variable Cost

Expenditures that change in line with production or sales quantities, notably labor and materials.

Mixed Cost

A cost consisting of both fixed and variable components, changing in total with the level of activity but remaining constant on a per unit basis only up to a certain level of activity.

Activity

A measure of actions or operations within a process, often used to allocate costs in activity-based costing.

Per Unit

A term referring to the cost, price, or quantity related to one unit of a product or service.