A decrease in the price level will
A)shift the short-run aggregate supply curve to the left.
B)shift the short-run aggregate supply curve to the right.
C)move the economy up along a stationary short-run aggregate supply curve.
D)move the economy down along a stationary short-run aggregate supply curve.
E)make the short-run aggregate supply function steeper.

Question

Quizplus · Accepted Answer

A decrease in the price level does not shift the short-run aggregate supply (SRAS) curve; instead, it moves the economy down along the existing SRAS curve because producers are willing to supply less at lower price levels.

A Decrease in the Price Level Will