Refer to the following figure to answer the following questions. -Based on the figure,which of the following would cause the short-run aggregate supply curve to shift from SRAS₁ to SRAS₂? A) Congress votes to increase the minimum wage. B) There is an increase in spending and firms respond by producing more output. C) Wages and input prices fall as the economy recovers from a recession. D) A severe drought reduces farm production. E) A temporary rise in the price of oil results in higher gasoline prices.

Question

Quizplus · Accepted Answer

A fall in wages and input prices reduces production costs, allowing firms to supply more at each price level, shifting the SRAS curve to the right.

Refer to the Following Figure to Answer the Following Questions