When Nominal Wages Increase, the Short-Run Aggregate Supply Curve

question 166

Multiple Choice

When nominal wages increase, the short-run aggregate supply curve:

• A) shifts to the right.
• B) shifts to the left.
• C) remains constant.
• D) disappears.

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Definitions:

Discounted

Reduced in price or reflecting the present value of future cash flows when taking into account the time value of money.

Present Value

The value today of a future amount of money or series of payments, adjusted for a specific return rate.

Discounted

The process of determining the present value of a payment or stream of payments that will be received in the future.

Present Value

The current value of a future amount of money or stream of cash flows, given a specified rate of return.