Question

In terms of aggregate supply, the short run is a period in which

Multiple Choice
the price level is constant.
employment is constant.
real output is constant.
nominal wages and other resource prices are inflexible.

Answer 1

In terms of aggregate supply, the short run is a period in which:

**nominal wages and other resource prices are inflexible.**

This characteristic of the short run explains why firms can respond to changes in demand by adjusting output rather than wages or prices.