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Short Run Aggregate Supply
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Short Run Aggregate Supply
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17. Aggregate Demand and Aggregate Supply Analysis / Short Run Aggregate Supply / Problem 1
Problem 1
Why do sticky wages lead to an upward sloping short run aggregate supply curve?
A
Wages are fixed, leading to decreased supply when prices rise.
B
Wages are slow to adjust, leading to higher profits and increased supply when prices rise.
C
Wages are irrelevant to the supply curve slope.
D
Wages adjust quickly, leading to decreased supply when prices rise.
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