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Explain why in the AS-AD model presented in lectures the short-run aggregate supply (SAS) curve slopes upward

Question

Explain why in the AS-AD model presented in lectures the short-run aggregate supply (SAS) curve slopes upward
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Solution 1

The Short-Run Aggregate Supply (SAS) curve slopes upward in the AS-AD model due to several reasons:

  1. Sticky-Wage Theory: According to this theory, the wages of the workers are sticky in the short run. This means that they do not adjust quickly to the changes in the economy. When the price level r Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
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