The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, production is

A) more profitable and employment and output rises.
B) more profitable and employment and output falls.
C) less profitable and employment and output rises.
D) less profitable and employment and output falls.

Sticky-Wage Theory

An economic theory that proposes wages tend to adjust more slowly to changes in the economy, affecting employment and labor market dynamics.

Short-Run Aggregate Supply Curve

Represents the relationship between the total production of goods and services at different price levels in an economy, assuming some inputs are fixed.

Price Level

A measure of the average of current prices across the entire spectrum of goods and services produced in the economy, often used to gauge inflation.