Aggregate supply increases when the money wage rate falls.
The aggregate supply curve shifts to the right as productivity increases as well as when the wage or prices falls. Thus, by lowering the inflation rate, higher output, and lower unemployment possible.
An increase in aggregate supply due to a decrease in input prices is represented by a shift to the right of the SAS curve. A second factor that causes the aggregate supply curve to shift is economic growth. The positive economic growth results from an increase in productive resources, such as labor and capital.
Thus, aggregate supply is a response to increasing prices that drive firms to utilize more inputs to produce more output.
Hence, option A is correct.
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