Which of the following will not lead to a leftward shift in the SRAS curve?
A) an increase in wage rates
B) an increase in the prices of nonlabor inputs
C) an increase in productivity
D) an adverse supply shock

Question

Quizplus · Accepted Answer

An increase in productivity will lead to a rightward shift in the SRAS curve, not a leftward shift. It will increase the potential output of an economy, leading to a higher level of output at any given price level. A leftward shift in the SRAS curve occurs when there is a decrease in the ability of an economy to produce goods and services at a given price level. This can occur due to factors such as an increase in wage rates or an adverse supply shock. An increase in the prices of nonlabor inputs will also lead to a leftward shift in the SRAS curve, as it will increase the overall cost of production for firms.

Which of the Following Will Not Lead to a Leftward