Question

What happens when the minimum wage increases, in the short run?

Select one:

a. Aggregate demand shifts right, the price level rises, and real output rises

b. Aggregate supply shifts down, the price level falls, and real output increases

c. Aggregate demand shifts left, the price level falls, and real output falls

d. Aggregate supply shifts up, the price level rises, and real output decreases

Answer 1

a. Aggregate demand shifts right, the price level rises, and real output rises