Over the long run, falling nominal wages will shift the short-run aggregate supply curve to the Blank______, which causes output to Blank______ back to the full employment level.

Question

Multiple choice question.

right; rise

left; rise

left; fall

right; fall

Answer 1

Over the long run, falling nominal wages will shift the short-run aggregate supply curve to the right, which causes output to rise back to the full employment level.

So the correct answer is: right; rise.