Final answer:
(A) More elastic. If there is an increase in the percentage of employees whose wages adjust automatically with changes in the price level, the aggregate supply curve will become more elastic.
Step-by-step explanation:
The increase in the percentage of employees whose wages adjust automatically with changes in the price level will make the aggregate supply curve more elastic. Elasticity of labor supply refers to the responsiveness of the quantity of hours worked to changes in wages. When a higher percentage of employees have wages that adjust with changes in the price level, they are more likely to adjust their hours worked in response to wage changes, making the supply curve more elastic.