Changes in short-run aggregate supply can be caused by changes in:
A) wages.
B) wealth.
C) government spending.
D) consumption spending.

Question

Quizplus · Accepted Answer

Short-run aggregate supply (SRAS) is primarily influenced by the cost of production, including factors such as wages, energy costs, and raw materials. Therefore, changes in wages (choice A) can impact the cost of production and subsequently shift SRAS. Changes in wealth (choice B) and consumption spending (choice D) are more likely to affect aggregate demand. While government spending (choice C) can impact both aggregate demand and supply, it is less directly related to the underlying cost of production that influences SRAS.

Changes in Short-Run Aggregate Supply Can Be Caused by Changes