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Figure: AD-AS Model II
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. If commodity prices rise, the _____ curve will shift to the _____.
A) SRAS; left
B) SRAS; right
C) AD; left
D) AD; right

Question

Use the following to answer questions:
Figure: AD-AS Model II 
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. If commodity prices rise, the _____ curve will shift to the _____.
A) SRAS; left 
B) SRAS; right 
C) AD; left 
D) AD; right

Quizplus · Accepted Answer

An increase in commodity prices will lead to an increase in the cost of producing goods and services, causing a decrease in short-run aggregate supply (SRAS) and shifting the SRAS curve to the left.

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