Need help with Macroeconomics!?

Question

The short-run aggregate supply curve is positively sloped because

a. business people suffer from money illusion

b. wages are sticky or don't readily adjust to changes in economic conditions in the short run

c. workers care about nominal wage, not real wages

d. of diminishing returns to labor

Answer 1

b. wages are sticky or don't readily adjust to changes in economic conditions in the short run.

It actually also assumes that inflation is really unexpected in this case (overvice real wages W/P would not change).

Answer 2

It takes time for the wages to adjust for inflation. The answer is B.