The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, production is Select one: a. less profitable and employment and output rises. b. less profitable and employment and output falls. c. more profitable and employment and output falls. d. more profitable and employment and output rises.

Question

Kendall

Business

10 July, 13:56

The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, production is Select one: a. less profitable and employment and output rises. b. less profitable and employment and output falls. c. more profitable and employment and output falls. d. more profitable and employment and output rises.

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Answers (1)

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Zaria Melendez · Answer 1

d. more profitable and employment and output rises.

Explanation:

The sticky wage model suggests that an upwards sloping short-run curve is based on the aggregate labor market and is being set by contracts they hire more. As increase the labor output and are more profitable due to the increase in the outputs and prices raises the outputs levels and so does the profits. And the us increase in the performance of the company.