Figure 20-2. -Refer to Figure 20-2. The shift of the short-run aggregate-supply curve from AS₁ to AS₂ A)could be caused by an outbreak of war in the Middle East. B)could be caused by a decrease in the expected price level. C)causes the economy to experience an increase in the unemployment rate. D)causes the economy to experience stagflation.

Question

Quizplus · Accepted Answer

A shift of the SRAS curve to the right occurs when there is an increase in the economy's ability to produce goods and services at any given price level. This can be caused by factors such as a decrease in the cost of production or an increase in technology. A decrease in the expected price level would also shift SRAS to the right, as firms would produce more in anticipation of lower prices, leading to an increase in output and a decrease in the price level. While options A, C, and D are all plausible events that could impact the economy, they would not be the cause of a shift in the SRAS curve as described in this scenario.

Figure 20-2. -Refer to Figure 20-2. the Shift of the Short-Run Aggregate-Supply