If the economy's current level of output rises above its potential level of output, the short-run aggregate supply curve will:
A)shift right.
B)shift left.
C)become horizontal.
D)become vertical.

Question

Quizplus · Accepted Answer

If the economy's current level of output rises above its potential level of output, it means that the economy is facing a shortage of resources, leading to higher costs of production. As a result, the short-run aggregate supply curve will shift to the left, indicating that producers can only offer a lower quantity of goods and services at higher prices.

If the Economy's Current Level of Output Rises Above Its