Use the following to answer questions:
Figure: AD-AS Model II
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. Which occurrence will raise the price level?
A) SRAS curve shifts to the left.
B) SRAS curve shifts to the right.
C) AD curve shifts to the left.
D) The economy moves down the aggregate demand curve.

Question

Use the following to answer questions:
Figure: AD-AS Model II 
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. Which occurrence will raise the price level?
A) SRAS curve shifts to the left. 
B) SRAS curve shifts to the right. 
C) AD curve shifts to the left. 
D) The economy moves down the aggregate demand curve.

Quizplus · Accepted Answer

A leftward shift of the SRAS curve will reduce the quantity of output supplied at any given price level, leading to a shortage of goods and services in the short run, and thereby causing an increase in the overall price level.

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