Principles of Macroeconomics / Unit 8 MAC 0709 short lesson, about 20 seconds
Why the Short-Run Curve Slopes Up
Captions available
The idea
Because nominal wages are fixed for a while, a higher price level lowers the real wage, so firms hire more and produce more. A lower price level does the reverse.
In practice
Trace demand shifting either way and the points you get map out the curve.
Where people slip
Unit five gave five reasons wages resist falling. Those reasons are what give this curve its slope.
Your place on the trail
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Builds on
Unlocks
- Nothing yet depends on this.
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