In the short run, a supply shock that shifts the short-run aggregate supply curve leftward____________ Real GDP and ____________ the price level.
A) decreases; raises
B) decreases; lowers
C) increases; lowers
D) increases; raises

Question

In the short run, a supply shock that shifts the short-run aggregate supply curve leftward____________  Real GDP and ____________ the price level.
A) decreases; raises
B) decreases; lowers
C) increases; lowers
D) increases; raises

Quizplus · Accepted Answer

A leftward shift in the short-run aggregate supply curve typically decreases Real GDP and raises the price level due to reduced output and increased costs.

In the Short Run, a Supply Shock That Shifts the Short-Run