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 ?

A. misperceptions theory of the short-run aggregate supply curve

B. sticky-price theory of the short run aggregate supply curve

C. classical dichotomy theory of the short-run aggregate supply curve

D. sticky-wage theory of the short-run aggregate supply curve

Found an error? Read our corrections policy and report it in the comments below.

Be the first to comment if anything wrong with this mcq
Your comment successfully submitted!
It will automatically posted after review and approval by our staff member.