The increase in energy prices that occurred in 2007-2008 led to a ________ in the ________ aggregate supply curve.
A) fall; short run
B) fall; long run
C) rise; short run
D) rise; long run

Question

Quizplus · Accepted Answer

The increase in energy prices in 2007-2008 led to higher production costs, causing the short-run aggregate supply curve to fall (shift leftward) as firms reduced output due to increased costs.

The Increase in Energy Prices That Occurred in 2007-2008 Led