If the fixed minimum nominal wage increases, then the aggregate supply schedule will
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2 marks, −0.666666666666667MacroeconomicsAD-AS modelKeynesian and short-run aggregate supplyEasyabout 2 min
DSE 2017 Question 47: AD-AS model
Answer and worked solution
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Plain-text version
If the fixed minimum nominal wage W₀ increases, then the aggregate supply schedule will (A) shift up (B) shift down (C) shift to the left (D) shift to the right
Also written as: If the fixed minimum nominal wage W_0 increases, then the aggregate supply schedule will
AD-AS model has come up 59 times in 7 exams since 2004.
What this question tests
This question is on Keynesian and short-run aggregate supply, part of AD-AS model in Macroeconomics.
Why output responds to demand in the short run: sticky wages and prices, wage floors and upward-sloping supply.
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