Respuesta :
Answer: Decrease in the short run aggregate supply. increase in long run aggregate supply
Explanation:
assuming the wage stays constant in the short run (price of labour), an increase inflation/general prices will lead to a decrease in the Supply of labour because the current wage is no longer enough to cover the same number of goods people used to buy which will then increase Unemployment. The Labor market will experience a situation where inflation and unemployment are increasing at the same time
The Supply of Labour will increase in the Long run because the wage price will have sufficient time to adjust and increase to a new equilibrium level. .an increase in wage price will increase the quantity of supplied.
Inflation is the situation of the economy that arises because of the circumstances of the increase in the flow of money supply. This leads to the waste of the source and also leads to the vast phase of the problems or hurdles for the middle-class and lower-class families.
The correct option is to decrease the short-run aggregate supply. increase in long-run aggregate supply
Option decrease in the short-run aggregate supply. increase in long-run aggregate supply is correct assuming that the wage stays constant in the short-run (the price of labour).
- An increase in inflation/general prices will lead to a decrease in the Supply of labour because the current wage is no longer enough to cover the same number of goods people used to buy which will then increase Unemployment.
- The Labor market will experience a situation where inflation and unemployment are increasing at the same time.
To know more about inflation and unemployment, refer to the link below:
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