If the money wage rate is constant and the price level increases, what happens to the real wage rate, firms' profits, and the aggregate quantity supplied?

What will be an ideal response?


The real wage rate falls. Because the price level has increased and money wage rates are constant while real wage rates are lower, firms' profits increase. As a result, the aggregate quantity of goods and services supplied increases.

Economics

You might also like to view...

Each point on the demand curve reflects

A) all the wants of a given household. B) the highest price consumers are willing and able to pay for that particular unit of a good. C) the highest price sellers will accept for all units they are producing. D) the lowest-cost technology available to produce a good.

Economics

Based on the above, which figure shows the impact of a decrease in the population available to work?

A) Figure A B) Figure B C) Figure C D) Figure D

Economics

The stockholders of a corporation have ________ liability and ________ required to pay all of the firm's losses

A) limited; are B) limited; are not C) unlimited; are D) unlimited; are not

Economics

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments

a. True b. False Indicate whether the statement is true or false

Economics