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The Short-Run Aggregate Supply Curve Is Upward Sloping Because

Question 242

Multiple Choice

The short-run aggregate supply curve is upward sloping because


A) money wage rates do not immediately change when the price level changes.
B) most business firms operate with long-term contracts for output but not labor.
C) a lower price level creates a wealth effect.
D) lower taxes motivate people to work more.

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