Suppose there is a increase in short-run aggregate supply with no change in long -run aggregate supply. This situation could be the result of
A) a decrease in the money wage rate.
B) an increase in the quantity of capital.
C) a technological advancement.
D) an increase in the price of oil.

Question

Quizplus · Accepted Answer

An increase in short-run aggregate supply with no change in long-run aggregate supply indicates a movement along the short-run aggregate supply curve. A decrease in the money wage rate will reduce firms' costs of production, resulting in an increase in short-run aggregate supply. An increase in the quantity of capital or a technological advancement would result in a shift in the long-run aggregate supply curve, which is not indicated in the scenario. An increase in the price of oil would increase firms' costs of production, reducing short-run aggregate supply.

Suppose There Is a Increase in Short-Run Aggregate Supply with No