Question

If workers actively demand pay increases when the price level is rising and are willing to accept pay cuts when the price level is falling, then the short-run aggregate supply curve would be: Choose one: A. always shifting to the right or the left. B. positively sloped as usual. C. nearly vertical. D. negatively sloped. E. nearly horizontal.

Answer 1

Answer:

C. nearly vertical.

Explanation:

The changes in any economic conditions will accompany (wage adjusts to the situation) with the wages and the price level will not have much effect on the real output so the short run supply curve is most likely long-run supply curve and vertical.