Problem
Part 1:
The graph gives a? long-run aggregate supply curve and a? short-run aggregate supply curve.
Draw a new curve that shows the effect of a rise in the money wage rate. Label it.
Part 2:
With a rise in the money wage? rate, ______.
A. the quantity that firms are willing to supply at each price level decreases
B. firms have an incentive to use more? capital-intensive methods in? production, which will increase potential GDP in the long run
C. firms have an incentive to produce more because they can charge a higher price
D. potential GDP decreases in the long run because the size of the labor force decreases
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.