Exhibit 8-4 -Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS₂ to SRAS₁ would have been the result of A) a decrease in the price level. B) an increase in the price level. C) an increase in wage rates. D) a decrease in wage rates.

Question

Quizplus · Accepted Answer

An increase in wage rates would increase production costs, causing the short-run aggregate supply curve to shift left from SRAS2 to SRAS1.

Exhibit 8-4 -Refer to Exhibit 8-4.A Shift in Short-Run Aggregate Supply from Aggregate