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Aggregate Supply Shape Flexible Prices and Sticky Wages

MACRO-E5JSVK

Which of the following descriptions best describes the short run aggregate supply when goods prices are flexible, but all nominal wages are perfectly sticky?

A

The short run aggregate supply curve is perfectly horizontal.

B

The short run aggregate supply curve is positively sloped.

C

The short run aggregate supply curve is perfectly vertical.

D

The short run aggregate supply curve is negatively sloped.

E

None of the above are correct.