1804EconomicsMedium
Suppose the price level falls but because of fixed nominal wage contracts the real wage rises and firms cut back on production This is a demonstration of the?
Asticky-wage theory of the short-run aggregate supply curve
Bsticky-price theory of the short run aggregate supply curve
Cclassical dichotomy theory of the short-run aggregate supply curve
Dmisperceptions theory of the short-run aggregate supply curve
Correct answer
A. sticky-wage theory of the short-run aggregate supply curve
Explanation
The correct answer is sticky-wage theory of the short-run aggregate supply curve.