The Short-Run Aggregate Supply Curve Is Positively Sloped Because

question 191

Multiple Choice

The short-run aggregate supply curve is positively sloped because:

• A) business people are subject to money illusion.
• B) wages are sticky.
• C) workers care about nominal wages,not real wages.
• D) of diminishing returns to labour.

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Definitions:

Operating Efficiently

The practice of minimizing waste and maximizing resources to achieve optimal productivity and profitability in a business's operations.

Precautionary Motive

A theory explaining the demand for liquidity by individuals and firms as a safeguard against future cash needs and uncertainties.

Safety Margin

The difference between the actual value of a company's sales and the break-even sales, serving as a buffer for unexpected declines in revenue.

Financial Reserve

A portion of funds set aside by a business or organization to cover future obligations or unexpected expenses.