-In the above figure, the short- run aggregate supply curve is SAS₁. If the prices of resources fall, there is A)a shift to SAS₀. B)a shift to SAS₂. C)an upward movement along SAS₁. D)a downward movement along SAS₁.

Question

Quizplus · Accepted Answer

A fall in resource prices reduces production costs, leading to an increase in aggregate supply, which shifts the short-run aggregate supply curve to the right, from SAS₁ to SAS₂.

-In the Above Figure, the Short- Run Aggregate Supply Curve