Which of the following events shifts the short-run aggregate supply curve to the right?
A) a decrease in the money supply
B) a drop in oil prices
C) an increase in government spending on military equipment
D) none of these answers
E) an increase in price expectations

Question

Quizplus · Accepted Answer

A drop in oil prices will decrease production costs for firms which will lead to an increase in short-run aggregate supply, shifting the curve to the right. None of the other options listed would result in a shift to the right in the short-run aggregate supply curve.

Which of the Following Events Shifts the Short-Run Aggregate Supply