Multiple Choice
If the short-run macroeconomic equilibrium occurs in the upward-sloping range of the short-run aggregate supply curve and government increases personal income tax, then which of the following will be true in the long run?
A) The nominal wage of workers will be lower compared to what it was in the short run.
B) Output will be lower compared to what it was in the short run.
C) The nominal wage of workers will be higher compared to what it was in the short run.
D) The price level will be higher compared to what it was in the short run.
Correct Answer:

Verified
Correct Answer:
Verified
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