Economics · Macroeconomics
The short-run aggregate supply curve is upward sloping because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1elasticity of demand with respect to price is equal to unity
- 2elasticity of wages with respect to price is equal to unity
- 3elasticity of wages with respect to price exceeds unity
- 4nominal wages are sticky in the short run, so a higher aggregate price level leads to higher profit per unit of output and increased aggregate output✓
Correct answer
nominal wages are sticky in the short run, so a higher aggregate price level leads to higher profit per unit of output and increased aggregate output
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