Macro EasyBib: citation styles Eat This, Not.. ips and More CCD Connect Login Ne

Question

Macro EasyBib: citation styles Eat This, Not.. ips and More CCD Connect Login Netflix- Wat.Mow If the l run aggregate Price lenal (GDP price Index 2009-100) 140 130 AS 120 100 90 5 16 Real GDP (trillions of 2009 dellars) 17 The figure above shows the aggregate supply curve and potential GDP Based on the figure above, the aggregate supply curve shifts rightward and the potential GDP line does not change when the money wage rate rises the money wage rate falls the price level rises D the price level falls. both the price level and money wage rate rise by the same proportion. 16 MacBook Pro

Explanation / Answer

The AS curve shifts rightward when money wage rate falls. (More labour would be supplied when the wage rate falls in nominal terms and the supply at a given price level would increase)

Option 2 is correct

(Increase in price level would negate the rise in money wage rate, change in only price level would not shift the AS curve)

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