Which of the following shifts the short-run aggregate supply right?
A) an increase in government spending
B) an increase in manufacturing wages
C) a decrease in the price of oil
D) a decrease in immigration from abroad

Question

Quizplus · Accepted Answer

A decrease in the price of oil lowers production costs for firms, allowing them to produce more output for a given price level. This leads to an increase in short-run aggregate supply.

The other choices would shift the short-run aggregate supply curve to the left. An increase in government spending would increase demand for goods and services, leading to higher output and prices in the short run and reducing the availability of resources for other uses in the long run. An increase in manufacturing wages would increase firms' production costs and reduce their profitability, leading them to reduce output and increase prices in the short run. A decrease in immigration from abroad would reduce the labor force and limit firms' ability to produce goods and services, reducing output and increasing prices in the short run.

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